Highlights
- Trump administration secures 180-day temporary truce on rare earth export restrictions with China.
- Maintaining high bilateral tariffs.
- The U.S. remains critically dependent on China for essential minerals used in defense, automotive, and semiconductor industries.
- Experts warn the six-month agreement signals deeper structural weaknesses in America’s industrial and supply chain autonomy.
In a rushed attempt to stabilize worsening trade tensions, President Trump has announced a temporary “rare earth truce” with China—effectively freezing Beijing’s export restrictions for six months. While the administration touts the deal as a diplomatic breakthrough, critics warn it may be little more than a geopolitical reprieve masking deeper structural weakness in America’s industrial base.
The deal, framed as a restoration of a prior agreement reached in Switzerland, leaves in place high bilateral tariffs (55% U.S. and reciprocal Chinese levels) but allows rare earth exports to resume—albeit under a fragile 180-day window. The trigger for renewed talks was China’s sudden cutoff of critical minerals such as samarium, used in jet fighter components like SmCo magnets, which sent shockwaves through U.S. defense and manufacturing sectors.
“Six months is not strategy—it’s a countdown,” noted one analyst. Without meaningful domestic refining or processing capacity, the U.S. remains dangerously reliant on China for essential inputs into weapons systems, EVs, and semiconductors.
Despite the rhetoric of economic sovereignty, the Trump administration has failed to deliver a cohesive rare earth strategy. The so-called “big beautiful bill” offers no robust investment in U.S. critical mineral supply chains, nor does it expedite the development of refining infrastructure. Meanwhile, auto manufacturers are exploring production shifts to China simply to maintain access to key materials. To President Trump’s credit, he has issued a couple of executive orders on the topic, including a 232 action. But this will likely not be enough.
This latest trade pivot highlights a troubling pattern: the U.S. provoking supply shocks through tariff escalation, only to retreat under pressure from bond markets, industry leaders, and national security risks. Critics warn that this emperor-has-no-clothes moment—marked by shifting timelines, conflicting internal messaging, and a lack of industrial planning—may erode Trump’s economic credibility.
In the arena where autonomy matters most—rare earth and critical mineral supply—the U.S. appears to be giving up ground. With China’s refining dominance intact and the clock ticking, this six-month truce may mark not a victory, but the beginning of deeper dependence.
Rare Earth Exchanges continues to call for urgent industrial policy: DPA-backed financing, permitting reform, and vertically integrated REE supply chains. The time for crisis response is over. The time for a national strategy is now. Unfortunately, it’s become an American politician’s tradition to kick this can down the road. President Trump needs to change that trajectory, rethink priorities, and consider designing and implementing a comprehensive industrial policy for critical minerals. President Trump: Don’t continue the politicians’ tradition.
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