Xi Comes to Washington Armed With a Rare-Earth Card

U.S. President Donald Trump will face Chinese President Xi Jinping this week in a high-stakes summit, carrying a powerful card: rare earths. Rare earths have been a significant factor in the U.S.-China relationship since April 2025, following the imposition of punishing tariffs by Trump. China responded with its own restrictions on rare-earth trade, setting the stage for multiple rounds of negotiations and trade escalations.

In November, both sides agreed to a one-year trade truce, set to expire. Since then, the U.S. has been actively working to reduce its mineral vulnerabilities, while Chinese rare-earth exports have fluctuated. The U.S. Trade Representative, Jamieson Greer, has rated China's rare-earth exports as mediocre, with a drop in August shipments of rare-earth magnets to the United States.

Ahead of the meeting, both leaders seem uncertain about addressing China's rare-earth card. Jennifer Welch, a Bloomberg Economics analyst, expressed concerns about doing anything that might limit the flow of rare earths. Analysts' expectations of the potential outcomes are limited, as both parties believe extending the truce is in their interest.

Chris Kennedy, a former NSC director for international economics, reiterated that China's dominance in rare-earth supply chains is expected to continue until at least 2030. U.S. dependence on Chinese rare-earth supply chains is considerable, involving various stages of production and intermingling with Chinese goods. The defense sector's reliance on rare earths has become increasingly apparent, given the Iran war and dwindling U.S. supplies of critical munitions.