Months of fraught U.S.-China trade talks have laid bare just how reliant the United States is on China for rare earths, the powerful raw materials that underpin technology from fighter jets to wind turbines.
Washington and Beijing have been locked in a bitter trade war since U.S. President Donald Trump announced sweeping tariffs on much of the world in April, at one point driving up tariffs on China to a staggering 145 percent. China struck back by singling out one of Washington’s key vulnerabilities: rare earths.
Alongside other countermeasures, Beijing unveiled new export restrictions largely targeting heavy rare earths. China maintains a chokehold over the world’s rare-earth supply chains, with Chinese firms commanding around 85 percent of rare-earth processing and 92 percent of magnet production.
Rare earths and critical minerals “have emerged as the Achilles’s heel of the U.S. in the U.S.-China trade discussions,” said Ashley Zumwalt-Forbes, a former U.S. Energy Department deputy director for batteries and critical minerals under the Biden administration. Their “importance could not be overstated.”
Before Trump took office this year, Beijing had already banned exports of the technologies behind rare-earth magnet production, extraction, and separation. But China’s latest countermeasures went even further, sparking outcry from U.S. manufacturers and driving two rounds of high-level talks between U.S. and Chinese negotiators.
After weeks of frustrated negotiations and accusations, China’s Commerce Ministry confirmed last week that it would approve rare-earth export applications to the United States and that Washington would “cancel a series of restrictive measures it has taken against China.”
Rare earths have become China’s “single-most powerful tool” in negotiations, said Gracelin Baskaran, an expert in critical minerals security at the Center for Strategic and International Studies. “The U.S. needs access to rare earths, and it is willing to negotiate for it. China sees it as a powerful bargaining tool.”
But what are rare earths, really? At the most basic level, rare earths are a grouping of 17 metallic elements that can be found on a periodic table and bear names such as neodymium and dysprosium.
There are two kinds of rare earths, said Baskaran: light and heavy. China especially dominates the separation of heavy rare earths, she said, making Beijing’s latest export restrictions—which mostly targeted heavy rare earths—especially painful for the United States. “We have no alternate sources of heavy rare earths,” Baskaran said.
Despite their name, rare earths are not actually that rare. “The name is actually a misnomer,” said Adam Webb, an analyst at Benchmark Mineral Intelligence, a consultancy. “They’re not that uncommon in the Earth’s crust. It’s just processing them that is difficult and challenging.”
From advanced weapons systems to green energy infrastructure, rare earths are a critical component in many of the world’s advanced technologies. Every F-35 fighter jet, for example, is built with more than 900 pounds of rare earths; more than 1,000 pounds of the metals go into building a wind turbine.
“They’re in every form of defense technology; they’re in MRI scanners, they’re in cancer treatment; they’re in your phones, your laptops; they’re in chips,” Baskaran said. “Because they are so cross-cutting, a rare-earth shortage is not going to be isolated to one sector.”
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Washington wasn’t always so vulnerable to Beijing’s grip on rare-earth supply chains.
The United States was once the largest producer of rare earths, Baskaran said. But the U.S. domestic mining industry transformed decades ago as environmental concerns grew and many companies struggled financially. U.S. lawmakers began to see mining as a sector that could be outsourced to other countries, and in 1996, Congress shuttered the U.S. Bureau of Mines.
As the United States turned away, China doubled down. Beijing has for decades poured immense capital and resources into research efforts and industry infrastructure, giving it such an entrenched hold over market supply today that it has been able to influence global prices—and make it difficult for anyone else to compete.
China has also weaponized its rare earths in past geopolitical spats, most notably when it briefly halted exports to Japan in 2010. The move sent shockwaves through Tokyo, which rushed to slash its reliance on Beijing. But the White House didn’t take the same steps.
“The issue is that the Chinese gave warning 15 years ago—15—that they dominated the space and they were going to use it as a means of controlling things,” said Christopher Ecclestone, a mining strategist at the financial advisory firm Hallgarten & Co. “And seemingly no one in Washington paid attention.”
If U.S. lawmakers weren’t paying attention then, they certainly are now. Rare earths and critical minerals were a priority of both the first Trump administration and the Biden administration, the latter of which harnessed the Inflation Reduction Act to encourage domestic production.
The resources have yet again emerged as a focus of Trump’s second term, with the president using critical minerals as justification for declaring a national energy emergency on his first day back in office. Trump’s bid to boost U.S. mineral supply chain security has played a key role in his administration’s approach toward Ukraine, Greenland, and even Canada. The U.S. leader is reportedly also weighing using Cold War-era authorities to power rare-earth projects, Bloomberg reported in June.
In recent months, U.S. lawmakers on both sides of the aisle have also introduced legislation, including the Rare Earth Magnet Security Act and the Critical Minerals Security Act, aimed at jump-starting the U.S. domestic industry and diversifying away from Beijing.
At the center of this push is MP Materials, which runs the only currently operating rare-earth mine in the United States and has been backed by multiple hefty U.S. government awards. In 2024, MP Materials was awarded a $58.5 million tax credit to advance construction of what would be the United States’ first fully integrated rare-earth magnet manufacturing facility, according to the company.
“I think there’s been a profound psychological shift on the part of both government and industry,” said Matt Sloustcher, the chief communications officer at MP Materials. “It’s no longer theoretical that this is a threat.”
Still, for all of these efforts to forge new supply chains, analysts say China will likely be able to continue to leverage its might in the immediate future. It takes years to engineer new critical mineral mining and processing supply chains, and the United States is on the back foot in what has emerged as a great geopolitical race.
“The U.S. will remain somewhat dependent on Chinese production for some time to come,” Benchmark’s Webb said.
“This is quite a strong bargaining chip that China can use in these trade negotiations because realistically, the U.S. can’t just turn the tap and start producing more rare-earth metals,” he said. “It takes time to develop these deposits and to develop the refining capacity as well.”