Highlights
- The May 13-15 Trump-Xi summit arrives as global supply chains face simultaneous crises: Strait of Hormuz disruptions, Chinese rare earth export controls, and intensifying U.S.-China industrial rivalry colliding at once.
- China controls 90% of rare earth refining, 98% of heavy rare earth processing, and 90% of magnet production, while both nations discover that decoupling is far harder in practice than political rhetoric suggests.
- With heavy rare earth exports 50% below pre-2025 levels and prices surging multiple-fold, the summit reveals a dangerous reality: both powers can disrupt each other’s industrial systems, yet neither can stabilize their own without some continued cooperation.
President Donald Trump’s May 13–15 summit with Chinese President Xi Jinping arrives at perhaps the most dangerous moment for global supply chains since the pandemic. Rare Earth Exchanges™ cautioned in its “Great Powers Era 2.0” framework that chokepoints—not just mines, tariffs, or trade deficits—would define the next phase of geopolitical competition. Now severe disruptions surrounding the Strait of Hormuz, ongoing Chinese rare earth export controls, and intensifying U.S.-Chinaindustrial rivalry are colliding simultaneously. For investors, the keylesson is sobering: while China currently maintains substantial leverage in rare earth refining and magnet supply chains, neither Washington nor Beijing possesses decisive systemic independence. Both economies remain deeply interconnected even as both race to reduce that dependence.
The Summit Beneath the Summit
Officially, the Trump-Xi meeting focuses on trade, Iran, tariffs, AI, agriculture, energy, and rare earths. In reality, the talks revolve around something larger: who controls the industrial foundations of the modern world.
China still controls roughly:
- 90% of global rare earth refining,
- approximately 98% of heavy rare earth processing,
- and about 90% of rare earth magnet production.
- Dozens of other critical mineral chokepoints
- Growing command of renewable energy systems
Meanwhile, the United States continues to anchor global finance, naval power, aerospace demand, advanced semiconductor ecosystems, and portions of global energymarkets.
Both powers are discovering the same uncomfortable truth: decoupling sounds easier in political speeches than in real industrial systems.
That is because both powers are entering this confrontation from positions of profound internal fragility. China faces mounting overcapacity, weakening demand, demographic decline, property-market stress, and increasingly centralized top-down controls that risk suffocating the entrepreneurial dynamism and private-sector creativity that once fueled its rise. America, meanwhile, wrestles with its own slow erosion: industrial hollowing, unsustainable debt expansion, deep political polarization, financialization, corporate consolidation, and the gradual weakening of the productive foundations that historically underpinned U.S. economic power. Both nations project strength abroad while quietly struggling with structural vulnerabilities at home.
Hormuz: The Chokepoint REEx Warned About
Following the Venezuela crisis, Rare Earth Exchanges™ repeatedly warned readers that future geopolitical escalation would likely center on maritime chokepoints—especially the Strait of Hormuz.
That risk has now materialized in significant form.
Iran-linked disruptions and military tensions surrounding the waterway are placing global oil, fertilizer, petrochemical, LNG, and industrial feedstock supply chains under mounting strain.
Reuters reports global oil supply could undershoot demand by nearly 4 million barrels per day in 2026 if disruptions continue.
This matters profoundly for rare earths because mining, separation, metallization, and magnet manufacturing remain extraordinarily energy-intensive processes.
Reading Through the Media Fog
Mainstream coverage often frames the summit through simplistic “winner versus loser” narratives. Politico portrays Trump as weakened by the Iran conflict. Reuters emphasizes China’s continuing leverage through rare earth export controls. AP highlights the diplomatic symbolism of the first U.S. presidential visit to Beijing in nearly a decade.
Each contains elements of truth. Each also risks oversimplifying a far more dangerous reality.
The deeper issue is that both nations now possess enough leverage to seriously disrupt the other’s industrial system, yet neither can fully stabilize its own supply chains without some degree of continued cooperation.
The Rare Earth Reality Investors Cannot Ignore
China’s rare earth restrictions are no longer theoretical.
Reuters reports exports of heavy rare earths including dysprosium, terbium, and yttrium remain roughly 50% below pre-2025 levels, while ex-China prices for some specialty materials have surged multiple-fold—and in certain yttrium markets dramatically more than that.
Western diversification efforts are accelerating across mining, refining, recycling, and magnet manufacturing. But full replacement of China’s integrated ecosystem likely remains years, if not decades away. That may be the single most important reality hanging over the summit.
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