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China's rare earth grip forces US concession: FP

  • By Al Mayadeen English
  • Source: Foreign Policy
  • 2 Jul 2025 15:40
3 Min Read

The move follows rounds of diplomatic engagement in Geneva and London amid growing concern in Washington over China's dominance in critical mineral supply chains.

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  • China's rare earth grip forces US concession: FP
    An MP Materials technician monitors advanced equipment at Independence. (Business Wire)

Foreign Policy (FP) reported on Monday that China is set to greenlight a new agreement allowing rare earth exports to the United States, marking a potential turning point in a tense area of US-China economic relations.

The move follows rounds of diplomatic engagement in Geneva and London earlier this year and amid growing concern in Washington over China's dominance in critical mineral supply chains.

Rare earth elements are essential to US industries, with applications ranging from consumer electronics to advanced weaponry. While rare earths are not geologically scarce, China currently accounts for roughly 60% of global production and more than 90% of processing capacity.

Over the years, Beijing has consolidated its grip on the sector through low-cost production, strategic acquisitions, and state-backed expansion.

"Beijing's decision to exercise this leverage over Washington in recent months has paid off," noted China analyst Scott Kennedy in Foreign Policy.

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China’s leadership in rare earths began in the 1980s through state support, strategic investment, and scientific development. By the mid-1990s, Chinese firms had outpaced Western rivals in scale and were nearing parity in quality. That said, the 1995 acquisition of US firm Magnequench reflected global competition, not hostility.

While China was investing in industrial capacity, scientific research, and infrastructure, the US was allowing its supply chain to atrophy. Despite repeated warnings from experts, Washington allowed key facilities like the Mountain Pass mine to fall into disrepair. Even after China temporarily restricted exports to Japan in 2010, a sovereign decision amid a geopolitical dispute, the US failed to rebuild its capabilities in any meaningful way. Fifteen years later, Mountain Pass remains the only rare earth production site in the US, and it still depends on Chinese processing.

Strategic mineral stalemate

Trump's attempts to revive the industry were poorly executed and lacked a coherent strategy. His second-term priorities, focused more on deregulating fossil fuels than investing in strategic industries, have done little to address America's rare earth dependence, according to FP. In contrast, China has continued to improve its domestic sector while maintaining responsible control over exports to ensure global market stability.

On that note, China's rare earth policy is not only industrial, but it is also protective of national intellectual resources. As The Wall Street Journal recently noted, Beijing is implementing tighter internal measures to safeguard technological knowledge, including monitoring rare earth experts and controlling travel. These steps are rational in a world where technology transfer often leads to exploitation and unfair competition.

According to FP, this latest export agreement should not be mistaken for China caving to pressure. Rather, it reflects a position of strength: China is choosing cooperation while remaining the undisputed leader in the rare earth sector. The US, for its part, has once again been forced to return to the negotiating table due to its strategic shortcomings.

Read more: Quad forms initiative to challenge China rare minerals control

  • rare earth minerals
  • supply chain
  • China-US relations
  • Strategic Leverage
  • rare earths
  • minerals

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