NEW YORK - US President-elect Donald Trump should deploy tariffs strategically rather than bluntly as he aims to support American mining companies facing stiff Chinese competition, a senior executive at cobalt producer Jervois Global said on Wednesday.

Jervois, like many US producers of cobalt, lithium and other critical minerals, has struggled in recent years as Chinese rivals flood global markets with cheap supplies of metals often produced at standards below what is expected by many governments and manufacturers.

For Jervois, that competition led it to close the only US cobalt mine before it even opened. Cobalt is used to make electric vehicle batteries, electronics and a range of weapons, among other goods.

Trump, who takes office in January, has threatened to impose wide-ranging tariffs on Canada, Mexico and China, each tied to a basket of policy proposals with far-reaching aims. Speculation has swirled in recent weeks that Trump could use tariffs to bolster American mining.

"With tariffs, we do have to be careful. What we're looking for is a more scalpel than sledgehammer approach," Matthew Lengerich, head of the company's US operations, said in an interview at the Reuters NEXT conference in New York.

Lengerich noted that cobalt and other critical minerals are not typically imported in their raw metal form into the US, but used overseas to build cell phones and other products that are then imported.

The US, for example, already imposes a 25% tariff on Chinese cobalt that is somewhat ineffectual as few Chinese miners bring the metal into the country.

"Demand for cobalt continues to grow and it's actually growing at an incredible rate," Lengerich said. "But the market's oversupplied at the moment."

EFFECT OF TAX CREDITS

Tying the Inflation Reduction Act's EV tax credits to where critical minerals are procured, though, is the kind of market prod that should be encouraged by Washington, Lengerich said.

"We have actually seen a change in purchasing behaviors and customers willing to pay up to a 25% premium for the cobalt sulfate that ultimately ends up in an electric vehicle," Lengerich said.

"Those are the kinds of policy things that we need to learn from and say, 'Well, how else could we incentivize manufacturers to use domestic supply (of metals) in their products.'"

Trump's transition team is aiming to do away with that EV tax credit, Reuters reported last month.

Washington should consider establishing a national program to stockpile metals when commodity prices are low in order to financially help US mining companies and to ensure supply for defense purposes, Lengerich said.

For Australia-based Jervois, though, its U.S. cobalt mine is likely to remain mothballed until prices for the metal hit at least $20 per pound, roughly double current levels, Lengerich said. That's largely because of the cost to meet high US safety, labor and environmental standards.

"We certainly have to see much higher prices than what we have today," Lengerich said. "It isn't a level playing field, and I think that's one of the things that makes it really challenging."

The company last year received Pentagon funding to study how best to develop a US cobalt refinery, something the country also lacks.

Despite Trump's widely-known support for oil and gas production, Lengerich said he expects the incoming president to support more domestic mining, largely due to national security concerns.

"We'd expect to see continued support for the building of those supply chains," Lengerich said. "These things don't happen overnight. They're challenging projects that take time to bring to fruition."