Highlights
- China’s strategic delay in rare earth export licenses threatens the Geneva trade agreement and exposes the global resource power struggle.
- China controls over 85% of global rare earth element processing, using supply chain control as a geopolitical leverage tool.
- The U.S. must develop domestic refining capacity, form strategic alliances, and invest in circular economy technologies to reduce dependency.
A tentative trade detente between the U.S. and China is now in jeopardy, with China’s failure to deliver on promised rare earth export approvals at the center of the unraveling. According to The Wall Street Journal (opens in a new tab), Beijing’s delay in processing licenses for critical mineral exports has fueled accusations from Washington that the agreement struck earlier this month in Geneva is effectively dead. While the WSJ highlights this fracture in U.S.-China economic diplomacy, Rare Earth Exchanges breaks down the deeper implications: this is not just a bilateral spat—it’s the front line of a global resource war, and China’s winning.
Beijing’s Tactical Delay: Weaponizing Time, Not Just Trade
The Geneva talks resulted in what U.S. negotiators described as a “pragmatic breakthrough”: China would expedite the issuance of export licenses for certain rare earth elements (REEs) and critical minerals, a concession made under mounting pressure from global automakers and semiconductor firms. However, just weeks later, China appears to have reversed course. According to WSJ sources, key shipments remain stalled, with export paperwork “delayed indefinitely” for materials like neodymium, dysprosium, and terbium—essential inputs for electric motors, defense systems, and data storage.
U.S. Trade Representative Jamieson Greer (opens in a new tab) stated on CNBC that “China’s stalling violates the spirit and the letter of the Geneva agreement.” The reality may be more strategic: Beijing is leveraging the chokepoint it controls—midstream processing of rare earths—as a geopolitical countermeasure to the Trump administration’s escalating tariffs.
What WSJ Overlooked: The Midstream Monopoly Trap
While the WSJ focuses on the export license bottleneck, Rare Earth Exchanges (REEx) underscores the systemic problem: even when Western companies mine rare earths (e.g., MP Materials in the U.S., Lynas in Australia), the processing and refining of these minerals still occur overwhelmingly in China. Over 85% of the global rare earth element (REE) separation capacity remains in Chinese hands. Beijing doesn’t need to ban exports outright—it simply slows down approvals or redirects supply to “friendly” entities, as it recently did for European semiconductor firms while leaving U.S. and Taiwanese companies out.
This kind of selective enforcement signals that China’s rare earth policy is no longer about global commerce—it’s about targeted influence, ultimately with the aim of geopolitical power. Of course, China could counter that the Trump administration launched the trade war, and there is some truth to that. On the other hand, China must acknowledge U.S. national interests. The U.S. had been present since Nixon’s first trip on February 21, 1972, to open China. Economic forces represent a confluence of historical, societal, and political realities, and while Trump’s approaches could be more polished and refined, the underlying troubles in America are real.
Can Geneva Be Salvaged?
The Geneva accord was widely seen as a step toward stabilizing trade tensions. But the apparent breakdown raises urgent questions:
- Did U.S. negotiators overestimate China’s willingness to play fair?
- Were the terms too vague to be enforceable?
- And is there any viable recourse when supply chain sabotage is informal, untraceable, and deniable?
Sources familiar with the Geneva meeting say the agreement lacked clear benchmarks, timelines, or penalties. “It was more handshake than contract,” says a senior U.S. official speaking on background. That makes enforcement nearly impossible. Meanwhile, American firms are left vulnerable.
And that’s a problem. Without clear, concise terms to track and adhere to, deals don’t materialize.
Market Fallout: Strategic Uncertainty Ahead
News of the stalled exports is already rippling through markets. Rare earth oxide prices—especially for dysprosium and terbium—have edged higher in anticipation of tightening supply. Defense contractors and EV producers, who are reliant on stable REE inputs, are reassessing their procurement pipelines. Retail investors are also watching sector ETFs (like REMX) for signals.
REEx warns retail investors to expect further price volatility, trade shocks, and speculative misinformation. The platform encourages careful monitoring of geopolitical risk indicators rather than short-term pricing movements.
What the U.S. Must Do Next–Policy, Not Platitudes
If Washington is serious about reducing its dependency on rare earths, several initiatives and actions could be considered. Of cours,e the Trump administration understands the need to accelerate domestic refining capacity. Projects like Energy Fuels (White Mesa, Utah) and Phoenix Tailings (Massachusetts) need fast-tracked permits, investment incentives, and Department of Defense procurement guarantees.
Much like other nations, as reported by REEx, the U.S. must treat rare earth elements (REEs) as it does petroleum—stockpiling critical magnet materials for the defense and energy sectors. REEx cannot emphasize enough the importance of partnerships and alliances with traditional allies. The initial premise of Liberation Day was flawed due to its unilateral declarations against traditional allies. We need them, in a tightly aligned imperative. Start with the traditional Give Eyes, mostly in Canada and Australia, midstream ventures are crucial to creating a resilient Western supply chain.
Next are enforced export reciprocity aims. Washington should consider countermeasures—e.g., restrictions on downstream tech exports to firms benefiting from China’s selective REE favoritism. And so, importantly, we cannot emphasize enough the promotion of circular economy investments. From urban mining and rare earth element (REE) recycling to magnet recovery technologies. It’s time for an industrial policy targeting critical minerals; they are just as important, if not more so, now than oil.
Note that there are not nearly enough targeted and directed measures in The Big Beautiful Bill concerning this urgent matter.
Retail Investor Takeaway–Stay Informed, Not Just Reactive
REEx emphasizes that this is not a momentary dispute—it is a structural shift in global economic power. For retail investors, that means thinking long-term. Key opportunities and risks will emerge not just from mining, but from overlooked segments like:
- Separation and refining
- Magnet manufacturing
- Recycling and substitution technologies
Stay tuned to REEx for unbiased insights across upstream, midstream, and downstream developments in this evolving geopolitical mineral war.
About Rare Earth Exchanges
Rare Earth Exchanges is the leading independent platform that tracks the entire rare earth and critical mineral supply chain—from mining and refining to application and recycling. Our mission is to empower retail investors, as well as policymakers and industry stakeholders, with fact-based reporting, data tools, and strategic intelligence. See REEx Forum (opens in a new tab) as well.
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