[News] Rare Earths in Focus Ahead of Trump-Xi Talks as U.S. Dependence on China Could Last Into 2030s

Rare earths are set to be a key focus of the upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping. According to Reuters, the U.S. is expected to remain dependent on China for rare earths well into the 2030s despite rapidly expanding domestic mining and processing capacity, leaving the imbalance as a key challenge for Trump ahead of the talks.

The pressure is already visible in trade flows. Financial Times reports that China’s rare-earth magnet shipments to the U.S. fell to 512 tonnes in August, down 20% from July and 13% from a year earlier. Washington believes Beijing has not fully delivered on its earlier commitment to maintain uninterrupted supplies, the report adds.

The rare earth dispute is also increasingly intertwined with broader U.S.-China technology tensions. Reuters notes that Beijing is pressing Washington to further delay restrictions that would cut thousands of Chinese companies off from advanced U.S. technology, while the U.S. is seeking looser Chinese controls on rare earths and other critical minerals. AP notes that AI and advanced chips are among the technologies at the center of U.S.-China tensions. U.S. export controls continue to restrict China’s access to the world’s most advanced chips, while Chinese AI models narrow the gap with their U.S. counterparts and domestic chipmakers make progress.

U.S. Pushes to Reduce Rare Earth Reliance on China

Against this backdrop, Trump has made rare earths a national security priority, directing billions of dollars toward companies including MP Materials, USA Rare Earth and Energy Fuels in an effort to reduce China’s dominance, Reuters notes. While those investments are beginning to bear fruit, continued reliance on imports highlights the difficulty of rebuilding a domestic rare earth industry after the U.S. largely abandoned the sector in the late 20th century. The dependence also leaves Trump with a weaker bargaining position in talks with Xi, according to the report.

A particularly significant gap remains in heavy rare earths used in military applications, which the U.S. currently processes in very limited quantities. Benchmark data cited by Reuters indicates that U.S. production of these specialized materials is expected to increase by 2031, but will still fall short of domestic demand. Analysts cited by the report say Western countries are now in a stronger position to reduce their reliance on China, but replacing Chinese supply across the entire rare earth value chain remains far more difficult.

Still, the U.S. rare earth industry is beginning to expand. Reuters notes that MP Materials earlier this month began supplying General Motors with magnets made using rare earths it refined itself. Startups including Nth Cycle and Ucore Rare Metals are also developing alternative approaches to rare earth refining.

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(Photo credit: The White House)