China’s Rare Earth Leverage Tightens as U.S. Strikes Fragile Deal

Highlights

• China maintains near-total control of rare earth refining and supply chains, giving Beijing significant geopolitical leverage.
• The new agreement suggests Washington may have accepted China’s export conditions despite domestic rare earth development initiatives.
• The deal underscores China’s continued ability to control global critical mineral markets and potential geopolitical negotiations.

A new U.S.-China rare earth agreement underscores Beijing’s enduring dominance over global critical mineral supply chains, according to Foreign Policy’s (opens in a new tab) James Palmer. While details of the deal remain undisclosed, it appears Washington has quietly accepted export conditions imposed by China, reaffirming its strategic leverage in a sector vital to defense, electronics, and clean energy.

Beijing’s negotiating strength stems not just from its near-total control of rare earth refining and separation, but from the deep vertical integration of its supply chain—from raw material to finished magnet. This gives China the ability to turn the tap on or off with precision—and on political terms.

The timing of this agreement is notable. With the U.S. scrambling to launch domestic rare earth initiatives like Ramaco’s Brook Mine in Wyoming, the need for near-term supply may have forced concessions, despite rising bipartisan calls for decoupling from Chinese critical minerals. Palmer notes the optics: Washington’s willingness to strike a deal could signal strategic vulnerability or economic pragmatism.

For investors, the key question is: What did the U.S. give up to secure this deal—and for how long? Will China continue to use rare earths as a geopolitical lever? And how will this impact the valuation and viability of Western rare earth developers betting on future independence?

As the Brook Mine and other projects push forward, this latest development serves as a sobering reminder: Beijing still sets the tempo in the rare earth game—and Washington may still be dancing to it.

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