Rare Earth Rumble: Trump-Xi Talks May Cool Trade War, But China’s Mineral Muscle Still Stings

  • Hopes are rising for a breakthrough in U.S.-China trade tensions as Presidents Donald Trump and Xi Jinping prepare for a high-stakes conversation that could ease months of economic friction.

  • U.S. officials say a direct Trump-Xi call could break the deadlock, especially after both sides agreed in Geneva to a 90-day pause on punishing tariffs. Treasury Secretary Scott Bessent expressed optimism that “gaps could soon be bridged,” hinting at a possible reset in relations.

  • However, the rare earths dispute remains a stubborn flashpoint. China, which dominates global production and processing of these critical minerals, has slowed export license approvals, effectively squeezing U.S. industries reliant on rare earths for everything from electric vehicles to advanced military hardware.

  • Washington is increasingly frustrated, with concerns that China’s export restrictions are deliberate and strategic, not just bureaucratic delays. Trump has publicly accused Beijing of violating the Geneva deal, while China counters that the U.S. is undermining the agreement with new tech export bans and visa restrictions.

  • The rare earth standoff exposes a deep U.S. vulnerability: America relies on China for about 70% of its rare earth imports, and domestic alternatives are years away. As China tightens its grip, U.S. defense and tech sectors face risks of shortages, price spikes, and production slowdowns.

  • Beijing’s leverage is clear—by holding back rare earths, China wields powerful negotiating currency, especially as the U.S. scrambles for alternative sources and tries to shore up its own supply chains.

  • While a Trump-Xi summit could cool some trade tempers and potentially restart the flow of some goods, the rare earths issue is far from resolved. As one U.S. official put it, “Maybe it’s a glitch in the Chinese system. Maybe it’s intentional. We’ll see after the president speaks with Xi.”

  • For now, the world’s two largest economies are locked in a high-stakes game—where minerals, not just tariffs, are the ultimate bargaining chips.

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