Highlights
- China controls over 85% of global rare earth processing, using mineral exports as a strategic geopolitical pressure tactic.
- U.S. domestic rare earth refining capacity remains limited, despite bipartisan support for ‘Made in America’ mineral supply chains.
- Ongoing trade tensions suggest continued volatility in rare earth markets, with potential for export diversification and downstream manufacturing shifts.
A new Bloomberg report highlights escalating tensions between the U.S. and China over access to rare earth elements (REEs), despite both sides agreeing last month in Geneva to scale back tariffs. With President Trump accusing China of breaching the agreement and seeking direct talks with Xi Jinping, critical mineral supply chains are again under scrutiny—and the leverage appears to be tilting in Beijing’s favor.
The Bloomberg piece paints a familiar picture: China’s dominance in rare earth processing and magnet production continues to give it outsize influence in the broader U.S.-China trade conflict. Despite American efforts to diversify supply, China still refines over 85% of the world’s rare earths, and in recent months has reportedly slowed export approvals for neodymium, dysprosium, and terbium oxides—materials vital for electric vehicles, wind turbines, and advanced defense systems.
What’s notable, and accurate, in _Bloomberg_’s reporting is the growing concern that China is not just a passive player in global trade but is now weaponizing its rare earth dominance as a pressure tactic. This aligns with verified customs data from Q1 2025 showing a sharp fall in Chinese REE exports to the U.S., alongside increased shipments to “friendly” nations within BRICS+ and the Global South.
REEx Take
Less emphasized in the article, however, is the lag in U.S. countermeasures. Despite dozens of announcements and bipartisan support for “Made in America” mineral supply chains, domestic refining capacity remains limited. Projects from MP Materials and Energy Fuels show promise but are still in the scaling phase. MP Materials remains number two on the Rare Earth Exchanges (REEx) NdPr Project/Deposit Ranking list with Lynas Rare Earths in Australia at number one.
The Pentagon’s Defense Production Act allocations have helped de-risk certain upstream operations, but downstream magnet manufacturing remains almost entirely offshore.
While Bloomberg accurately notes the geopolitical leverage China holds, it downplays the industrial bottlenecks within the West. For instance, the article omits the fact that even some rare earth feedstock from non-Chinese mines often ends up processed in China due to a lack of alternatives. Additionally, the U.S. still lacks a national stockpile of strategic rare earth elements—a vulnerability increasingly viewed as unsustainable.
Implications
With Trump’s public rebuke of Beijing and Xi’s strategic control over outbound rare earth element (REE) flows, the global rare earth market is now a chessboard of geopolitics and industrial policy. Investors, OEMs, and policymakers must brace for further volatility, both in pricing and availability. Expect continued export diversification from China, more aggressive Western subsidies, and likely downstream mergers and acquisitions (M&A) activity in magnet manufacturing.
The Geneva agreement may have cooled tariff rhetoric, but the critical mineral war is just heating up. _Bloomberg_’s coverage offers a timely snapshot—but beneath the headlines lies a deeper, unresolved dependency: the world still runs on Chinese rare earths.
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