The US trade deal with China seeks to resolve a significant sticking level of their ongoing trade conflict: rare-earth minerals.
Despite a number of rounds of talks with US trade negotiators over the previous a number of months, China continued to slow-walk guarantees to the Trump administration that it could unlock essential rare-earth metals, and earlier ensures of expedited rare-earth licenses to US firms by no means materialized. Beijing even tightened earlier this month its controls by massively increasing its restrictions..
Under Thursday’s deal, China agreed to roll again these newly imposed guidelines, although the preliminary restrictions unveiled in April seem to stay in place.
The tussle over rare earths precedes the present administration; China for years has constructed up near-total management of the minerals as a part of its wider industrial policy.
Here’s what you want to find out about rare earths.
What are rare earths, and are they truly ‘rare?’
Rare earths embrace 17 metallic parts within the periodic desk made up of scandium, yttrium and the lanthanides.
The title “rare earths” is a little bit of a misnomer, because the supplies are discovered all through the Earth’s crust. They are extra considerable than gold, however they are tough and expensive to extract and course of and are additionally environmentally damaging.
Rare earths are ubiquitous in on a regular basis applied sciences, from smartphones to wind generators to LED lights and flat-screen TVs. They’re essential for batteries in electrical autos, in addition to MRI scanners and most cancers therapies.
Rare earths are additionally important for the US navy. They’re utilized in F-35 fighter jets, submarines, lasers, satellites, Tomahawk missiles and extra, in accordance to a 2025 analysis note from CSIS.
Sixty-one % of mined rare earth manufacturing comes from China, in accordance to the International Energy Agency, and the nation controls 92% of the worldwide output within the processing stage.
There are two forms of rare earths, categorized by their atomic weights: heavy and mild. Heavy rare earths are extra scarce, and the United States doesn’t have the aptitude to separate rare earths after extraction.
“Until the start of the year, whatever heavy rare earths we did mine in California, we still sent to China for separation,” Gracelin Baskaran, director of the Critical Minerals Security Program on the Center for Strategic and International Studies, advised NCS.
However, the Trump administration’s announcement of sky-high tariffs on China in April derailed this course of. “China has shown a willingness to weaponize” America’s reliance on China for rare earth separation, she stated.
The US has one operational rare earth mine in California, in accordance to Baskaran.
Beijing is utilizing rare earths as main leverage within the trade conflict, and its newest restrictions have been a significant matter of dialog when Xi and Trump met Thursday on the APEC summit in South Korea.
Earlier this month, China added five rare-earth elements – holmium, erbium, thulium, europium, ytterbium, and associated magnets and supplies – to its present management listing, requiring export licenses. That makes the overall quantity of restricted rare earths to 12. China additionally required licenses to export rare earth manufacturing applied sciences overseas.
It’s not the primary time this 12 months that Chinese restrictions on rare earths have angered Trump. In June, Trump stated on Truth Social that China violated a trade truce as Beijing stored its export controls on seven rare earth minerals and related merchandise.
The export controls may have a significant affect, because the US is closely reliant on China for rare earths. Between 2020 and 2023, 70% of US imports of rare earth compounds and metals got here from the nation, in accordance to a US Geological Survey report.
But China’s newest restrictions have been seen as a dramatic escalation in Trump’s trade conflict between the world’s two largest financial powers.
NCS’s Nectar Gan, John Liu, Donald Judd, Kylie Atwood, Phil Mattingly and David Goldman contributed to this report.