The new China-US trade deal is being celebrated in Washington, but it’s a mixed bag at best. While it avoids the worst—a full-blown trade collapse—it also avoids doing anything meaningful about one of the biggest problems: China’s grip on rare earth metals.
For anyone not deep into the details, here’s what matters: China controls 85% of global rare earth refining. These metals power everything from iPhones to electric cars. And the deal? It basically says, “Let’s worry about that later.”
The deal lets the US slap 55% tariffs on Chinese goods, while China hits back with 10% on US imports, including oil and gas. That could kill energy exports from the US to China.
Sure, Trump called it a “great deal.” But unless your definition of “great” includes higher inflation and delayed action on vital materials, this might not be the win it’s claimed to be.
Rare Earths: The Quiet Power Play
Trump mentioned rare earths when announcing the deal, claiming China would “provide the metals up front.” But there’s no real plan to change the fact that the US doesn’t control the supply chain. It’s a lot like saying you’ll get VIP access to a party… but someone else still owns the guest list.
And here’s the thing—rare earths aren’t actually rare. The challenge is mining and refining them economically. That’s where China has a lead, and unless the West puts money where its mouth is, nothing will change.
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The Real Problem: No Backup Plan
Western governments keep saying these minerals are “critical.” But if you’re not building your own supply chain, how critical can they be? Right now, companies don’t want to invest in new mines because they can’t beat China on price. And governments aren’t offering the help needed to make those projects viable.
So, China stays in control. And next time trade tensions flare, expect rare earths to become a bargaining chip—again.
If You’re Beijing, Why Not Play the Long Game?
By giving up just enough to avoid a crisis, China keeps its control and learns more about how far the US will bend. If China keeps using rare earths as leverage, it might finally push the US and allies to build a serious supply chain—but don’t bet on that happening anytime soon.
As it stands, the West is still stuck talking while China quietly keeps the power cords plugged in.
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