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The Hindu
09-07-2025
- Business
- The Hindu
Rare earths emerge as a geopolitical lynchpin in the rising China-U.S. rivalry
'They're going to deliver rare earths to us,' U.S. Commerce Secretary Howard Lutnick said in an interview on June 27. 'And once they do that, we'll take down our countermeasures.' Mr. Lutnick's remarks came just a day after a White House official confirmed that the U.S. and China had reached 'an additional understanding' to implement the Geneva agreement — a deal reached on May 12 that had paused new tariffs for 90 days and set a mid-August deadline for further talks. Soon after, U.S. President Donald Trump announced that Washington had signed an agreement with Beijing. He offered few details but hinted at a possible deal with India in the near future. China also confirmed the agreement. These announcements were the first formal confirmation of a partial breakthrough after months of escalating trade and technology tensions between the world's two biggest economies. The recent developments came after high-level delegations from both countries met in London on June 9 and 10 for two days of negotiations. The talks, which lasted for more than 20 hours, were led on the American side by Treasury Secretary Scott Bessent, Commerce Secretary Lutnick, and U.S. Trade Representative Jamieson Greer, while the Chinese delegation included Vice Premier He Lifeng, Commerce Minister Wang Wentao, and chief trade negotiator Li Chenggang. The focal point of the talks was one mineral group: rare earth elements (REEs) — a strategic mineral group critical to both economies. The 17 rare elements Often described as the 'vitamins of the modern economy,' it is a group of 17 chemically similar metallic elements. These include 15 silvery-white metals called lanthanides, or lanthanoids, plus scandium and yttrium, which are indispensable to a range of civilian and military applications, from electric vehicles and wind turbines to radar systems, precision-guided weapons, and stealth aircraft. REEs are not finished magnets or minerals, but raw elements extracted from complex ores and later processed into specialised materials. Despite their name, REEs are not geologically scarce, rather, their extraction and processing is expensive, complex, and hazardous to the environment. The 15 lanthanide elements include lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium (atomic numbers 57–71). Scandium and yttrium, though not lanthanides, are often grouped with REEs due to their similar properties. Neodymium and praseodymium are used in powerful magnets that run electric vehicle motors and wind turbines. Europium is used in LED displays. While cerium and lanthanum are employed in catalytic converters, glass polishing, and camera lenses, samarium and dysprosium are essential in high-performance magnets and defence systems. Gadolinium has applications in MRI machines, while other REEs play a role in lasers, batteries, and fibre-optic cables. REEs are divided into two categories: light rare earths (from lanthanum to gadolinium) and heavy rare earths (from terbium to lutetium). Light REEs are widely used in consumer electronics, batteries, and industrial applications, while heavy REEs are more valuable due to their specialised uses, limited supply, and crucial role in military, nuclear, and high-performance magnet applications. What sets REEs apart are their unique magnetic, luminescent, and chemical properties. Origin, process of refining REEs are not found in pure form like gold or copper. Instead, they are typically dispersed in mineral ores, such as bastnäsite and monazite. Once mined, they undergo a complex, multi-step process: the ore is crushed, chemically leached, and then separated through solvent extraction to isolate individual elements. These are then refined into metals or oxides used in high-performance magnets, batteries, and defence systems. While deposits exist in many parts of the world, China dominates the rare earth supply chain — not because it holds the most reserves, but because it invested early in large-scale refining infrastructure. According to the U.S. Geological Survey (USGS), China accounts for nearly 70% of global REE mining and more than 90% of refining capacity. The country's rare-earth journey dates back to 1927, when scientists discovered major deposits in Bayan Obo in Inner Mongolia. Production began in 1957, and over time, deposits have been located across 21 provinces and autonomous regions, from Fujian and Guangdong to Jiangxi and Sichuan. The choke point While rare earths are often discussed in terms of green energy and electronics, their military importance is equally, if not more, critical. Samarium-cobalt magnets, for instance, remain stable at high temperatures and are vital to precision weapons. Dysprosium strengthens magnets used in stealth aircraft. Yttrium and terbium enhance night vision and targeting systems. This military dependence is precisely why recent export curbs by Beijing rattled Washington. The London talks resulted in limited but noteworthy progress. China agreed to expedite the review and approval of thousands of export applications from manufacturers in the U.S. and to create a 'green channel' for trusted American firms. However, the deal did not cover military-grade materials, which are a key concern for the U.S. According to a Reuters report, Beijing has not committed to grant export clearance for some specialised rare-earth magnets that U.S. military suppliers need for fighter jets and missile systems. Beyond China Hence, the U.S. is actively seeking alternative resources for rare earth elements. The Mountain Pass mine in California currently supplies over 10% of the world's rare-earth raw materials. However, much of the ore still has to be sent to China for processing, due to the lack of domestic refining infrastructure. This has prompted a broader outreach beyond U.S. borders. In Greenland, the vast Kvanefjeld deposit, ranked among the world's top three rare earth sites outside China, could alone supply up to 15% of global demand for REEs. Though part of the Kingdom of Denmark, Greenland is self-governing and controls its own natural resources, including some of the world's largest reserves of rare earth, lithium, cobalt, and uranium — all critical to the clean energy transition and modern defence technology. However, Greenland lacks processing infrastructure. Greenland's Minister for Business, Trade and Raw Materials, Naaja Nathanielsen, in a BBC report, said that interest in the territory's minerals has 'absolutely increased within the last five years or so.' Meanwhile, Mr. Trump even floated the idea of acquiring Greenland, calling it essential 'for national security and international security.' During a joint session in Congress in March, he said, 'We strongly support your right to determine your own future, and if you choose, we welcome you into the United States of America. We will make you rich.' Ukraine, too, holds enormous potential. According to USGS, the country has 5,00,000 tonnes of lithium in its reserves, 20% of global graphite reserves, and significant supplies of neodymium and other high-tech metals. As part of ceasefire negotiations, Russian President Vladimir Putin had hinted that rare earth reserves in the territories Russia captured during the war could be opened to global markets. However, a source who spoke to the South China Morning Post remains sceptical, citing damage on the ground and Ukraine's lack of refining capacity as major hurdles to replacing China's dominance. 'Even if Washington manages to strike a deal, war damage and population displacement from the war would make extraction tough,' he said. He also expressed doubts over how reliance on Ukraine would dislodge China's place from that global supply chain, given that the processing capabilities in any market are going to struggle to match what China currently offers. Other possible locations, according to USGS are: Australia, Brazil, Russia, India, Vietnam, and Canada, as well as African nations like Madagascar, Tanzania, South Africa, and Burundi. Parallel to these efforts, the U.S. is also investing in recycling rare earths from used electronics and magnets. For now, all the talk and frameworks offer a temporary easing of tensions — a narrow civilian corridor in a broader landscape of unresolved disputes. With military-grade materials still off the table, the deal falls short of a reset. And unless the U.S. and its allies significantly ramp up investments in rare earth processing infrastructure, China's dominance will remain not just an economic asset but a powerful geopolitical lever.
CNBC
15-05-2025
- Business
- CNBC
China lifts export controls for 28 U.S. companies, but not key rare earths
China has temporarily paused export restrictions targeting 28 American companies on the heels of the trade truce Beijing reached with the Trump administration over the weekend in Switzerland. However, one key non-tariff countermeasure has yet to be reversed: export curbs on seven rare earth metals. According to the Geneva trade statement, China has agreed to "adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025." One of those countermeasures is the rare earths export curbs. On April 4, China announced a package of retaliatory measures to President Donald Trump's "Liberation Day" tariffs, including placing the export restrictions on samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium – elements that are important for America's defense, energy, and automotive industries. It is unclear why the rare earths controls were not included when the Chinese Commerce Ministry announced easing of other non-tariff countermeasures from April. On Wednesday, China removed 28 American companies from its export control list for dual-use items for 90 days. It also took 17 companies off its "unreliable entity list" including 11 for 90 days. On the same day, the Commerce Ministry issued a statement on China's efforts to clampdown on smuggling of rare earths and the need for broader government control of the metals for national security. "All departments agree that comprehensive control of strategic minerals is essential," it reads. The vast majority of the rare earth elements (REEs) imported to the United States come from China. They are viewed by Beijing as an effective leverage point in its trade negotiations with Washington. A social media account linked to the national broadcaster CCTV has been hinting of their importance around the trade talks. "With U.S. defense industries now 'strangled by rare earth shortages', what changes might occur in American weapons and equipment?" Yuyuantantian posted last Friday. Many of the 28 American companies given a reprieve on dual-use export restrictions are common targets for sanctions by Beijing, because of their activity in the defense sector. The first 16 of these companies were added to the Chinese export control list on April 4, days after Trump's announcement imposing steep tariffs on most products from China. Those companies include Universal Logistics Holdings, Inc.,Cyberlux Corporation, Hudson Technologies Inc., and Oceaneering International, Inc. Beijing added a dozen more companies to the export control list on April 9, the same day that Trump announced a three-month pause on tariffs for every country except China. The companies hit that day include Teledyne Brown Engineering, Inc., Kratos Unmanned Aerial Systems, Inc. and Insitu, Inc. Any company that wants to export dual-use items from China needs first to get approval from the country's Commerce Ministry. The 17 companies on the "unreliable entity list" are prohibited from importing to, or exporting from, China and from making new investments in the country. The companies given a reprieve from this list include several drone manufacturers such as Sierra Nevada Corp., and Kratos. China added 11 of those companies to the list on April 4, and another six on April 9.
Daily Tribune
07-04-2025
- Business
- Daily Tribune
China vows to stay 'safe and promising land' for foreign investment
A top Chinese official has vowed to protect US firms and pledged his country will remain a "promising land" for foreign investment, Beijing said Monday, after it slapped 34 percent tariffs on US imports. China retaliated last week against levies at the same level announced by US President Donald Trump on what he called "liberation day". It also imposed export controls on seven rare earth elements, including gadolinium -- commonly used in magnetic resonance imaging -- and yttrium, which is used in consumer electronics. Vice commerce minister Ling Ji told a panel of US company representatives on Sunday that the tariffs "firmly protect the legitimate rights and interests of enterprises, including American companies", his ministry said. Those levies -- which come into effect on Thursday -- "are aimed at bringing the United States back onto the right track of the multilateral trade system", he told the representatives, including of GE Healthcare and Medtronic. Also present was a representative of electric vehicle giant Tesla, run by close Trump advisor and tech billionaire Elon Musk, who has extensive business interests in China. "The root cause of the tariff issue lies in the United States," Ling said. He urged the firms to "take pragmatic actions to jointly maintain the stability of global supply chains and promote mutual cooperation and win-win outcomes". The United States exported $144.6 billion in goods to China in 2024, much less than the $439.7 billion it imported, Commerce Department data shows. Among its exports, key sectors include electrical and electronic equipment and various fuels, alongside oilseed and grains. Trading floors were overcome by a wave of selling on Monday, in response to the showdown. The selling in Asia was across the board, with no sector unharmed -- tech firms, car makers, banks, casinos and energy firms all felt the pain as investors abandoned riskier assets. Among the biggest losers, Chinese e-commerce titans Alibaba tanked more than 14 percent and rival shed 13 percent, while Japanese tech investment giant SoftBank dived more than 10 percent and Sony gave up 9.6 percent.
Yahoo
07-04-2025
- Business
- Yahoo
China vows to stay 'safe and promising land' for foreign investment
A top Chinese official has vowed to protect US firms and pledged his country will remain a "promising land" for foreign investment, Beijing said Monday, after it slapped 34 percent tariffs on US imports. China retaliated last week against levies at the same level announced by US President Donald Trump on what he called "liberation day". It also imposed export controls on seven rare earth elements, including gadolinium -- commonly used in magnetic resonance imaging -- and yttrium, which is used in consumer electronics. Vice commerce minister Ling Ji told a panel of US company representatives on Sunday that the tariffs "firmly protect the legitimate rights and interests of enterprises, including American companies", his ministry said. Those levies -- which come into effect on Thursday -- "are aimed at bringing the United States back onto the right track of the multilateral trade system", he told the representatives, including of GE Healthcare and Medtronic. Also present was a representative of electric vehicle giant Tesla, run by close Trump advisor and tech billionaire Elon Musk, who has extensive business interests in China. "The root cause of the tariff issue lies in the United States," Ling said. He urged the firms to "take pragmatic actions to jointly maintain the stability of global supply chains and promote mutual cooperation and win-win outcomes". The United States exported $144.6 billion in goods to China in 2024, much less than the $439.7 billion it imported, Commerce Department data shows. Among its exports, key sectors include electrical and electronic equipment and various fuels, alongside oilseed and grains. Trading floors were overcome by a wave of selling on Monday, in response to the showdown. The selling in Asia was across the board, with no sector unharmed -- tech firms, car makers, banks, casinos and energy firms all felt the pain as investors abandoned riskier assets. Among the biggest losers, Chinese e-commerce titans Alibaba tanked more than 14 percent and rival shed 13 percent, while Japanese tech investment giant SoftBank dived more than 10 percent and Sony gave up 9.6 percent. ll-oho/je/dhw
Zawya
04-04-2025
- Business
- Zawya
China hits back at Trump tariffs with own taxes, export curbs
China on Friday announced a slew of countermeasures against tariffs imposed by President Donald Trump, including additional tariffs of 34% on all U.S. goods and curbs on export of some rare earths, deepening an escalating trade war. China's finance ministry said the additional tariffs would be imposed from April 10. Trump on Wednesday announced that China would be hit with a 34% tariff, on top of the 20% he imposed earlier this year, bringing the total new levies to 54%. Agriculture trade took another hit as Chinese customs imposed an immediate suspension on imports of sorghums from grain exporter C&D (USA) Inc., as well as poultry and bonemeal from three U.S. firms. Beijing also announced controls on exports of medium and heavy rare-earths, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium to the United States, effective April 4. "The purpose of the Chinese government's implementation of export controls on relevant items in accordance with the law is to better safeguard national security and interests, and to fulfil international obligations such as non-proliferation," the commerce ministry said in a statement. It also added 16 U.S entities to its export control list, which prohibits the export of dual-use items to affected firms. Another 11 U.S. firms were added to the "unreliable entities" list, which allows Beijing to take punitive action against foreign entities. The targeted firms includes Skydio Inc. and BRINC Drones over arms sales to democratically governed Taiwan, which China claims as part of its territory. The commerce ministry said the targeted companies seriously "undermined" China's national sovereignty, security and development interests and would be prohibited from new investments, import and export activities in China. It also launched an anti-dumping probe into imports of certain medical CT tubes from the U.S. and India, and a wider industry competitiveness investigation into imports of medical CT tubes. (Reporting by Mei Mei Chu, Ethan Wang, Shi Bu and Xiuhao Chen; editing by Mark Heinrich and Alex Richardson)
