How rare earth minerals could give China the upper hand in U.S. trade talks

NBC News

a day ago

'China doesn't just mine rare earth materials. They refine them and manufacture the magnets as well. So in fact, the closer you get to the final industrial use, the more dominant China becomes,' Andersson said.
Demand for rare earths has only increased as the automobile and electronics industries advanced in recent decades and began their clean energy transitions.
That has given China 'real leverage, not just economically, but geopolitically too,' Andersson said. 'They can influence global prices, supply availability, and really even the pace of green tech development.'
How China is using that leverage
China has long signaled its willingness to leverage its dominance in rare earths and the broader group of critical minerals, temporarily banning rare earths exports to Japan in 2010 over a territorial dispute.
Since 2023, it has also imposed export curbs on gallium, germanium, antimony, graphite, and tungsten, which are critical minerals but not rare earths. Also in 2023, Beijing banned the export of technology to extract and separate rare earths.
Export restrictions are not uncommon and countries around the world often impose them on products and materials they consider key for national security. The U.S., for example, has levied curbs on the export of its semiconductors to China in an attempt to slow Beijing's artificial intelligence advancements.
China has also introduced a licensing system requiring exporters to provide documents proving that the end products will not be used for military purposes, which can be difficult.
'This whole mechanism is such that it gives China visibility into where the minerals are going, who's using them and for what,' said John Seaman, a research fellow at the French Institute of International Relations. 'It allows China to sort of map the supply chain and map the usage, and therefore also map the vulnerabilities of countries.'
Experts also say that in the long term, the situation could give Chinese manufacturers an edge.
'The alternative is then to basically rely on Chinese-made technology. So you're not going to get your rare earth magnet, but you're going to get a Chinese wind turbine,' Seaman said.