China’s continued dominance of the global rare-earth industry is emerging as one of the most important economic issues facing U.S. President Donald Trump as he prepares to host Chinese President Xi Jinping in Washington this week.
Trump and Xi are scheduled to meet at the White House on Thursday, September 24, with trade, technology, artificial intelligence, Taiwan and other geopolitical disputes expected to feature prominently in their discussions.
But behind many of those issues lies a problem Washington has struggled to resolve: America’s continued dependence on China for critical minerals needed by industries ranging from automobiles and electronics to semiconductors and advanced weapons.
China controls as much as 70 per cent of global rare-earth mining, about 85 per cent of refining capacity and roughly 90 per cent of rare-earth metal, alloy and magnet production, according to estimates cited by Reuters.
That dominance has given Beijing significant leverage in its economic confrontation with Washington.
Rare-earth elements such as neodymium, dysprosium and yttrium are essential for manufacturing powerful magnets and specialised components used in electric vehicles, smartphones, wind turbines, aircraft, computer chips, missiles and other military equipment.
Replacing Chinese supplies is difficult because the challenge extends beyond extracting the minerals from the ground. China has spent decades developing the processing, refining and manufacturing capacity required to transform raw materials into products that industries can use.
The vulnerability became particularly clear during earlier U.S.-China trade confrontations when Beijing tightened controls on exports of rare earths and other critical materials.
Those restrictions disrupted supply chains and increased pressure on American manufacturers, demonstrating that aggressive U.S. trade or technology restrictions against China could trigger retaliation affecting industries inside the United States.
Trump and Xi reached agreements during meetings in Busan in 2025 and Beijing in May 2026 aimed at improving the flow of critical minerals.
Following their May meeting, the White House said China had agreed to address American concerns about shortages involving rare earths and other critical minerals, including yttrium, scandium, neodymium and indium.
However, problems have continued.
Some Chinese rare-earth suppliers stopped shipping certain materials to American customers in August amid concerns that they could face repercussions from Beijing.
U.S. officials have repeatedly pressed China to honour previous commitments to ensure that export licences and critical minerals continue flowing to American companies.
China’s rare-earth magnet exports to the United States also declined in August, reinforcing concerns in Washington that access to strategically important materials remains vulnerable despite agreements reached between the two governments.
The situation appears to be influencing Washington’s approach ahead of Thursday’s summit.
Unlike periods preceding some earlier meetings with Xi, Trump has so far avoided threatening China with sweeping new tariffs or announcing major new restrictions on American technology exports immediately before the talks.
Some trade and China-policy specialists interpret that approach as evidence that Washington is seeking to avoid provoking another round of Chinese restrictions on critical minerals while the United States remains heavily dependent on Chinese supplies.
That interpretation is disputed by some U.S. officials and lawmakers, who argue that Washington retains substantial leverage through tariffs, access to American technology, investment restrictions and the enormous U.S. consumer market.
The Trump administration has also continued taking targeted measures against Chinese companies even while avoiding a broader escalation.
Rare earths are therefore only one part of a much wider economic contest between the world’s two largest economies.
Artificial intelligence and advanced semiconductors are also expected to feature prominently in the Trump-Xi discussions. Washington has restricted China’s access to some sophisticated American chips and technology, while Beijing’s dominance of critical minerals gives it its own powerful tool in the technology competition.
U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng held preparatory discussions in New York ahead of the summit, with rare earths, artificial intelligence, trade and other economic issues on the agenda.
Another deadline is adding urgency to the negotiations.
China’s temporary suspension of additional rare-earth export controls is due to expire on November 10. Without another agreement or extension, businesses could face renewed uncertainty over supplies.
The United States has been investing in domestic mining and processing while seeking alternative supplies from allied and partner countries. However, building mines, processing plants and magnet-manufacturing facilities capable of competing with China’s established industry could take years.
That leaves the Trump administration facing a delicate calculation: maintaining pressure on Beijing over trade and technology while avoiding retaliation that could disrupt supplies needed by American manufacturers and the defence industry.
The September 24 meeting will therefore be closely watched for any agreement guaranteeing more predictable Chinese rare-earth exports to the United States.
Whatever emerges from the summit, China’s dominance of critical-mineral supply chains is likely to remain a central issue in U.S.-China relations until Washington and its allies develop substantial alternative sources.
