Discover why rare earth minerals are key in Trump’s trade fight with China and their global economic impact. Learn more here!
Table of Contents
What Are Rare Earth Minerals?
Introduction
Rare earth minerals are more than just obscure elements on the periodic table — they are central to the escalating trade tensions between the United States and China. With China tightening its export restrictions on these critical resources, President Donald Trump has threatened economic retaliation, underscoring the minerals’ strategic importance. From powering smartphones to advanced military equipment, rare earths are embedded in everyday technology and global defense systems, making them a high-stakes commodity in international trade disputes.
Rare earth minerals consist of 17 metallic elements including scandium, yttrium, and the lanthanides. Despite the name, these materials are not actually rare — they are abundant in the Earth’s crust but challenging and expensive to extract. Mining and processing them also present significant environmental concerns, adding to their strategic value.
Key Points:
- Include scandium, yttrium, and 15 lanthanides
- Abundant but hard to process
- Environmentally intensive extraction
Uses of Rare Earth Minerals
Rare earths are critical for modern technology:
- Consumer electronics: smartphones, laptops, flat-screen TVs
- Green energy: wind turbines, LED lights, and batteries for electric vehicles
- Healthcare: MRI scanners, cancer treatment equipment
- Military applications: fighter jets (F-35), submarines, lasers, satellites, Tomahawk missiles
According to CSIS 2025 research, rare earths underpin much of the U.S. military’s advanced technology, highlighting why supply restrictions have major geopolitical implications.
Global Production and Supply Chain
China dominates the global rare earth supply:
- 61% of mined rare earths come from China (International Energy Agency)
- China controls 92% of global processing
- Heavy rare earths are scarce and not separable in the U.S.
“Before this year, any heavy rare earths mined in California were still shipped to China for processing,” — Gracelin Baskaran, CSIS
The Mountain Pass mine in California, operated by MP Materials, is the only operational rare earth mine in the U.S., highlighting American dependence on Chinese processing.
Why Rare Earths Matter in the U.S.-China Trade War
China has increasingly weaponized rare earths as a strategic tool in trade negotiations. Recent developments include:
- Adding 5 rare earth elements to its restricted export list (holmium, erbium, thulium, europium, ytterbium)
- Requiring export licenses for 12 restricted elements
- Restricting rare earth manufacturing technologies from leaving China
These restrictions coincide with Trump’s planned meeting with Xi Jinping at the APEC summit, escalating tensions. Between 2020 and 2023, 70% of U.S. imports of rare earth compounds came from China (USGS report), emphasizing America’s reliance.
“Depending on China’s stance regarding the recent restrictive order, I will have no choice but to respond financially,” — Donald Trump, Truth Social
Economic and Strategic Implications
For the U.S.:
- Risk of supply chain disruptions in tech and defense
- Increased costs for electric vehicle and electronics production
- Potential for tariff-based retaliation
For China:
- Maintains industrial leverage
- Can influence global tech markets
- Enhances strategic bargaining power in trade negotiations
Can the U.S. Reduce Dependence on China?
The U.S. has taken steps to develop domestic rare earth capacity, but challenges remain:
- Few operational mines
- Lack of heavy rare earth separation capability
- Environmental and cost constraints
Investing in alternative sources like Australia, Canada, and recycling programs is critical for long-term supply security.
FAQs About Rare Earth Minerals
Q1: Are rare earth minerals really rare?
A: No, they are abundant in the Earth’s crust but difficult and costly to extract, making supply limited.
Q2: Why is China dominant in rare earths?
A: China controls over 60% of global mining and 92% of processing capacity, giving it strategic leverage.
Q3: What are rare earth minerals used for?
A: They are vital in electronics, green energy, medical devices, and advanced military equipment.
Q4: Can the U.S. produce its own rare earths?
A: Yes, but domestic mines like Mountain Pass are limited, especially for heavy rare earth separation.
Q5: How do rare earths affect the trade war?
A: China can restrict exports to pressure the U.S., impacting technology, defense, and industry costs.
Conclusion
Rare earth minerals are at the heart of U.S.-China trade tensions, underpinning technology, defense, and the global economy. As China leverages its near-monopoly on these critical elements, the U.S. faces strategic and economic challenges that could reshape trade and industry policies.