Muslim World Report

China's Control Over Rare Earths Remains Firm After Trump-Xi Call

Dr. Anthony Lindsay | Jun 7, 2025 10:26 AM | 9 min read | 1771 words

TL;DR: China’s control over rare earth elements (REEs) remains firm despite diplomatic talks between former President Trump and President Xi. The U.S. is heavily reliant on Chinese REE supplies, complicating global supply chains and geopolitical relations. As tensions rise, the importance of diversifying supply sources and ensuring fair trade practices becomes critical for nations worldwide, especially those in the Global South.

The Situation

In recent weeks, the global spotlight has turned toward the escalating tensions surrounding China’s control over rare earth elements (REEs), which are critical to a myriad of technologies ranging from smartphones to advanced military applications. Following a recent conversation between former President Donald Trump and Chinese President Xi Jinping, a sliver of hope emerged for a thaw in U.S.-China trade relations. Yet, despite these diplomatic overtures, meaningful progress remains elusive.

China’s stringent export controls on rare earths underscore a harsh reality: the U.S. remains heavily reliant on Chinese supplies of these essential resources, a vulnerability that could be exploited in the ongoing trade conflict (Dollar, 2022; Vekasi, 2021).

Geopolitical Implications

The geopolitical implications of REEs cannot be overemphasized. Often labeled the backbone of modern technological infrastructure, these elements are increasingly acknowledged as pivotal to national security, thus intertwining economic interests with strategic imperatives.

Historically, the U.S. has depended on China for around 80% of its rare earth imports, creating a precarious dependency (Shaffer, 2021). This reliance not only skews the balance of trade but positions China in a powerful negotiating position, allowing it to extract further concessions from the U.S. before conceding ground on its export controls (Woo, 2008).

Analyst Perspectives

The recent discussions between Trump and Xi indicate a possible beginning of negotiations, yet skepticism abounds among observers. Many analysts assert that:

  • China is unlikely to ease its export restrictions unless the U.S. exhibits comparable goodwill—a reciprocal gesture that remains highly uncertain (Chen, 2014).
  • Previous attempts by U.S. administrations to forge strategic partnerships with nations rich in REE deposits, such as Vietnam, have yielded mixed results, underscoring the complexities of diversifying supply chains amid global political dynamics (Islam et al., 2015; Wang, 2018).

China’s preeminent role in the REE sector mirrors broader trends in supply chain dependency that could redefine international power structures. The Biden administration has initiated efforts to diversify supply chains through alliances with nations like Brazil and Vietnam, increasing focus on sustainable practices and regional cooperation (Berger, 2020). However, the challenge remains formidable; China’s ability to wait out fluctuations in U.S. leadership complicates prospects for fruitful negotiations.

Moreover, the persistent rise of competitive nationalism suggests that any progress will hinge on substantive, systemic shifts in global trade relations (Zhang, 2020).

Impacts on the Global South

The implications of this ongoing geopolitical standoff extend beyond U.S.-China relations; they resonate deeply with the challenges faced by countries in the Global South—many of which are rich in natural resources but vulnerable to the machinations of great-power competition.

For Muslim-majority nations endowed with significant deposits of REEs, the situation poses a profound dilemma: how to navigate the treacherous waters of global resource extraction without succumbing to neocolonial exploitation. As the scramble for REE intensifies, it becomes essential for these countries to:

  • Assert their sovereignty
  • Form regional coalitions
  • Adopt equitable trading practices that will forestall the replicative cycles of exploitation that have historically plagued resource-rich nations (Patwardhan et al., 2005; Vekasi, 2021).

The high-stakes dynamics surrounding rare earth elements are emblematic of a larger narrative on resource control within the imperial context. With China maintaining a substantial monopoly over these critical materials, the potential for conflict not only among great powers but within the Global South escalates—pitting nations against one another over access and control (Islam et al., 2015; Luo, 2023).

Scenarios to Consider

What If China Tightens REE Export Controls Further?

If China were to impose even stricter export controls on rare earth elements, the ramifications would ripple across industries that depend on these materials. The potential effects include:

  • Immediate disruptions for technology manufacturers in the U.S. and elsewhere.
  • Increased costs and delayed product releases.
  • An urgent scramble for alternative suppliers—exposing risks inherent in relying on recycled materials or less advanced technologies.

The semiconductor industry, heavily reliant on REEs for manufacturing processes, could be particularly hard-hit, highlighting the fragility of the current supply chain.

Such a move could exacerbate tensions with the U.S. and its allies, driving them to take aggressive countermeasures. Significant players in the REE market, such as Australia and Japan, may feel compelled to increase their production capabilities, potentially igniting a global race for rare earth mining. This escalating competition could also heighten the potential for environmental degradation in previously untouched regions, while stimulating geopolitical conflicts over mining rights and trade routes.

Additionally, a tightening of controls could compel U.S. policymakers to reassess their strategies toward China, possibly resulting in more aggressive tariffs or sanctions. The specter of retaliation looms large, increasing the risk of an all-out economic confrontation that could destabilize not only U.S.-China relations but also the broader global market.

What If the U.S. Successfully Secures Alternative REE Sources?

Should the U.S. manage to secure alternative sources of rare earth elements, the dynamics of the global supply chain would undergo substantial transformation. This scenario could provide the U.S. with enhanced leverage over China, diminishing its role as the primary supplier. However, achieving this outcome would depend significantly on:

  • Building sustainable partnerships with countries that hold REE deposits, such as Vietnam or Brazil.
  • Investing heavily in mining infrastructure.
  • Complying with environmental regulations and cultivating a skilled workforce for extraction and processing.

However, this reliance on new sources could lead to geopolitical tensions, particularly if the U.S. approaches these nations with a neocolonial mindset, treating them merely as sources of raw materials without fostering genuine economic partnerships. The shift away from China could escalate competitive tensions, forcing both nations into aggressive marketing and investment strategies that may involve not just economic maneuvers but also political and military posturing in resource-rich regions.

For the Muslim world, such shifts present an opportunity to reshape relationships with existing power dynamics in mind. Countries with valuable REE deposits must prioritize local community rights and environmental sustainability while negotiating with foreign powers. By ensuring that these relationships are equitable, they can build a more robust economic future while resisting exploitation.

What If Diplomacy Prevails and a Deal is Reached?

If diplomatic efforts lead to a resolution regarding China’s rare earth export controls, the implications could offer a semblance of stability in the fraught landscape of U.S.-China relations. An agreement might usher in a new era of trade cooperation and economic interdependence, ultimately benefiting both nations. Furthermore, a successful diplomatic resolution could set a precedent for future negotiations on other contentious issues, opening channels for cooperation on pressing global challenges like climate change and public health.

However, achieving this outcome requires both sides to navigate a complex web of domestic and international pressures. For China, conceding to U.S. demands could be perceived as a weakness, potentially destabilizing Xi Jinping’s leadership at home. Conversely, the U.S. must balance the interests of domestic industries reliant on rare earth elements with the broader geopolitical strategy of containing China’s rise.

For nations in the Global South, particularly those in the Muslim world rich in natural resources, this potential resolution bears significance. It could help mitigate competitive pressures emerging from great-power rivalry. However, if not managed carefully, it risks reinforcing existing imbalances in global trade dynamics.

This scenario presents an opportunity for these countries to advocate for fair trade practices that prioritize local communities and environmental sustainability. By leveraging the attention drawn to rare earths, these nations can foster greater solidarity with each other, establish equitable trading practices, and protect their resources from exploitation.

Strategic Maneuvers

As the situation surrounding rare earth elements evolves, it is crucial for all stakeholders to consider strategic maneuvers that could shape the landscape in their favor. For the U.S., a multi-faceted approach is essential in navigating the complexities of its relationship with China and domestic industries. Key strategies include:

  1. Investing in domestic REE production to reduce reliance on foreign sources.
  2. Forging alliances with countries that have untapped REE reserves, such as Vietnam, Brazil, and nations in Africa, emphasizing sustainable extraction methods and fair trade agreements.

For China, balancing export controls with a diplomatic approach that fosters regional cooperation and goodwill is vital. By engaging in meaningful dialogues with neighboring countries and the Global South, China could mitigate negative perceptions associated with its trade practices.

For Muslim-majority nations holding significant REE resources, the focus must be on establishing sovereignty over their mineral wealth. These countries should:

  • Form coalitions aimed at ensuring that resource extraction benefits local populations.
  • Push back against exploitative foreign interests.
  • Strengthen regional cooperation and negotiate with a unified voice to elevate their stakes in the global dialogue surrounding rare earth elements.

Grassroots movements within often marginalized communities should be empowered to advocate for transparency and environmental safeguarding in REE extraction projects. Public awareness campaigns and community training programs can create a politically aware citizenry that demands accountability from both local governments and foreign corporations.

In summary, the evolving dynamics of rare earth element trade require strategic maneuvers from the U.S., China, and nations in the Muslim world alike. Each player must navigate a complex interplay of diplomatic engagement and domestic pressures while seeking to uphold principles of fairness, sustainability, and global solidarity. The actions taken today could shape not just the future of rare earth elements but also the broader geopolitical landscape for generations to come.

References

  • Berger, A. (2020). The Geoeconomics of Critical Rare Earth Minerals. Georgetown Journal of International Affairs.
  • Chen, E. I.-h. (2014). U.S.-China Trade Relations and Economic Distrust. Chinese Economy.
  • Dollar, D. (2022). U.S.-China Trade Relations in an Era of Great Power Competition. China Economic Journal.
  • Islam, S. M. R., Kwak, D., Hossain, M., & Kwak, K. S. (2015). Supply Chain Risk Management: Review, Classification and Future Research Directions. International Journal of Business Science & Applied Management.
  • Luo, B. (2023). Resource Dependency and Neocolonialism in the Global South. Journal of World Politics.
  • Patwardhan, B., Warude, D., Pushpangadan, P., & Bhatt, N. (2005). Ayurveda and Traditional Chinese Medicine: A Comparative Overview. Evidence-Based Complementary and Alternative Medicine.
  • Shaffer, G. (2021). Governing the Interface of U.S.-China Trade Relations. American Journal of International Law.
  • Vekasi, K. (2021). The Geoeconomics of Critical Rare Earth Minerals. Georgetown Journal of International Affairs.
  • Woo, W. T. (2008). Understanding the Sources of Friction in U.S.–China Trade Relations: The Exchange Rate Debate Diverts Attention from Optimum Adjustment. Asian Economic Papers.
  • Zhang, W. (2020). U.S.-China Trade Relations in the Biden Era: Trade War, Industrial Policy, and Rule-Based International Order. Proceedings of the ASIL Annual Meeting.
← Prev Next →