A Better Understanding of Rare Earth Minerals After the Xi–Trump Meeting

When Chinese President Xi Jinping and U.S. President Donald Trump recently met to de-escalate trade tensions, the headlines focused on tariffs, technology transfers, and the exchange of political gestures. Yet the most strategically important development may have been the quiet conversation about rare earth minerals — the set of 17 obscure elements that underpin much of the world’s high-tech economy and modern military power.

To understand why this topic matters, and why the United States and China remain locked in a complex interdependence, it helps to strip away the myths and examine what rare earths really are, how the global supply chain works, and what risks and opportunities lie ahead.

What Rare Earths Are — and Why They Matter

Rare earth elements (REEs) include names like neodymium, dysprosium, and terbium; metals that sound exotic but are essential for modern life. They are used in permanent magnets for electric vehicles and wind turbines, in lasers and guidance systems for fighter jets, in catalysts for oil refining, and in miniaturized electronics such as smartphones and medical devices.

Despite their name, rare earths are not especially rare in the Earth’s crust. What makes them strategically important is the difficulty and environmental cost of extracting, refining, and separating them into usable compounds. This complex chemistry is what has allowed China to build a near-monopoly over the past three decades.

China’s Dominance — and Its Vulnerabilities

China currently accounts for roughly 70 percent of global rare-earth production and an even higher percentage of processing capacity. Virtually all of the world’s magnet-grade rare earth oxides, especially neodymium, praseodymium, and dysprosium are refined in Chinese facilities.

However, China’s dominance is not simply geological; it is industrial and regulatory. Beginning in the 1990s, Beijing made a deliberate decision to tolerate the environmental costs of large-scale refining and to subsidize downstream industries that depend on rare earths, such as electronics, renewable energy, and defense components. Western countries, meanwhile, shuttered their own refineries for environmental reasons and became comfortable importing semi-finished materials.

But dominance does not mean invulnerability. China’s own domestic demand has soared as it builds electric vehicles, batteries, and electronics for both export and internal consumption.

According to recent trade data, China has increasingly imported higher-value rare-earth

compounds and magnet alloys from Japan, South Korea, and even the United States. In short, China exports raw or semi-processed material, but also relies on the outside world for advanced forms of those same materials.

That creates a paradox: while China can weaponize export restrictions, it also risks disrupting its own manufacturers if those restrictions cut off access to intermediate goods it needs to produce finished electronics. This mutual dependence has become one of the defining features of twenty-first-century geopolitics.

The U.S. Position — Less Helpless Than It Appears

It is true that the United States depends heavily on Chinese rare-earth imports. According to the U.S. Geological Survey (USGS), more than two-thirds of American imports of rare-earth compounds and metals still come from China. Yet the total import value (about $190 million in 2024) is tiny compared with the nearly $30 trillion U.S. economy.

The strategic risk lies not in dollar value but in supply concentration. Small interruptions in a few critical elements could paralyze entire industries. For example, each F-35 fighter jet requires several hundred pounds of rare-earth materials, including dysprosium and neodymium. The United States imports roughly 300 tons of dysprosium annually, enough to build thousands of aircraft, but dependent on just a handful of foreign refiners.

The good news is that the U.S. has begun rebuilding capacity. The Mountain Pass mine in California has resumed production and now supplies a growing share of U.S. feedstock. Partnerships with Australia, Canada, and the European Union are expanding, and companies such as MP Materials and Lynas Rare Earths are investing heavily in domestic processing facilities. The Department of Defense has also launched programs to recycle and stockpile strategic elements, while funding research into substitute materials that could reduce dependence altogether.

Economic and Strategic Realities

Despite these advances, rebuilding an entire supply chain is a long-term project. Rare-earth separation and metallization require specialized chemistry, complex waste management, and years of regulatory approvals. Even with new Western plants, China’s economies of scale and vertical integration will keep it dominant for the near future.

That dominance, however, carries risks for Beijing. Each time China has attempted to leverage its control, notably during the 2010 export restrictions, it has triggered global investment in alternative sources and technologies. Prices spiked tenfold, competitors entered the market, and within five years China was forced to rescind the quotas after a World Trade Organization ruling. In trying to exploit scarcity, China encouraged diversification.

The same dynamic may now repeat. The Xi-Trump meeting, by raising the issue of rare-earth export controls, has drawn renewed attention to supply-chain resilience. Whether motivated by economics or national security, the United States and its allies are now more determined than ever to build redundant capacity and ensure access.

Beyond Geopolitics — The Technological Transition

Rare earths are not just a commodity issue; they sit at the heart of the global energy and technology transition. Each electric vehicle motor requires up to a kilogram of neodymium magnets. Each offshore wind turbine needs hundreds of kilograms. As the world decarbonizes, demand for these materials could triple by 2040.

This demand surge creates both risk and opportunity. Nations that secure reliable rare-earth supply chains will gain a competitive advantage in clean energy, defense, and digital infrastructure. Those that fail may find themselves beholden to foreign suppliers for the basic inputs of modern industry.

From a policy standpoint, the solution is not autarky but diversification and transparency. That means investing in domestic refining, encouraging recycling, forming strategic stockpiles, and maintaining cooperative trade with trusted partners. It also requires acknowledging that the environmental costs of mining and refining cannot simply be outsourced. Responsible sourcing must become part of the industrial strategy.

Conclusion

The Xi–Trump meeting underscored an uncomfortable truth: the era of invisible supply chains is over. Rare earths may represent only a sliver of global trade by value, but they are the linchpin of entire industries from renewable energy to national defense.

China’s control of the rare-earth sector gives it real leverage, yet it also exposes its own dependence on global markets. The United States, meanwhile, is rediscovering that industrial capacity and environmental stewardship must coexist if it hopes to compete.

A better understanding of rare-earth minerals shows that this is not a zero-sum game. The challenge is not to “win” the rare-earth race but to create a stable, diversified, and transparent global system that can sustain innovation without succumbing to coercion. If the recent Xi-Trump dialogue helps move that goal forward even modestly, it may prove one of the most consequential outcomes of their meeting.