By Bhasha Singh
The United States has announced that a trade deal with China is on the verge of being finalized and that all major disputes have been resolved. The question is, what compelled President Donald Trump to make such an announcement? Not only that, he also declared that an agreement had been reached over the Chinese app TikTok. This statement is being seen as a major U-turn in global diplomacy.
Since assuming office on January 20, 2025, Trump had made confronting China one of his primary agendas. The trade war he launched was aimed at pushing Chinese goods out of American markets. Why, then, has Washington suddenly changed course? The answer lies in two words: rare earths.
Rare earth elements have become the hidden force dominating global geopolitics, and they are the very reason the United States has been compelled to bend before China. When Trump announced on October 27 that a trade agreement with China was imminent, it marked a striking reversal for a leader who had once vowed to cripple Beijing through tariffs and technology sanctions. At the heart of this shift lies China’s command over the world’s supply of rare earth minerals.
China currently controls around 70 percent of global rare earth production. These minerals are indispensable for defence systems, clean energy, high-tech industries, electric vehicles, and even smartphones. The U.S. defence industry, clean-energy sector, and high-technology manufacturing simply cannot function without them. For instance, rare earth materials are used in F-35 fighter jets, Arleigh Burke-class destroyers, and Virginia-class submarines. From electric vehicles to solar panels, almost every critical American industry relies on these resources — and China knows it.
In response to the U.S. trade and chip wars, China moved to tighten its grip on the export of rare earths, declaring that any company or country using them would now require Chinese approval. The move sent shockwaves through American industry. Subsequently, U.S. Treasury Secretary Scott Bessent confirmed that Trump’s proposed 100-percent tariffs on Chinese goods were no longer on the table. In return, China agreed to resume large-scale soybean purchases and postpone its export ban on rare earth minerals for at least a year.
China’s dominance in this arena is not accidental. Between 1990 and 2000, it invested heavily in the mining, refining, and processing of rare earths at remarkably low costs. Unlike other countries that merely extract ores, China controls the entire value chain — from refining to magnet manufacturing — ensuring a near-monopoly on the global supply network.
When Trump took office and declared his “America First” policy, pledging to free U.S. markets from Chinese products and impose 100-percent tariffs, many believed Beijing would buckle. Instead, China weaponized its hidden strength. By imposing tighter export controls on key heavy rare earths and permanent magnets, Beijing instantly affected America’s defence, clean-energy, and electric-vehicle sectors.
The United States can mine some of these minerals domestically, but refining and magnet production remain expensive, time-consuming, and technically complex. China, by contrast, has mastered this process. That is why Trump has been seeking rare earth supply deals with countries such as Ukraine, Japan, Malaysia, Vietnam, and Cambodia. Yet implementing these alternatives will take years and vast sums of money — a reality Beijing understands all too well.
Today, China holds the key to rare earth materials — and each time it turns that key, American industries tremble. The new Chinese export permit system has forced Washington to compromise. Over the past fifteen years, China’s calculated strategy has once again pushed the United States into retreat and brought Trump to the negotiating table.
With 70 percent of the world’s rare earth production under Chinese control, the United States and Trump have little choice but to bow to reality. For now, Trump’s dramatic U-turn is clear evidence that his credibility has taken a hit. (IPA Service)
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