Highlights

• China imposes export licenses on seven critical rare earth elements, controlling over 90% of global processing capacity.
• Geneva trade agreement unravels as both nations accuse each other of violating the pact through tech restrictions and supply disruptions.
• Rare earths emerge as a critical geopolitical leverage point in the ongoing economic conflict between the US and China.

The shine is off Geneva. Rare earths now front and center in escalating tech war.

Just weeks after the U.S. and China celebrated a fragile trade détente in Geneva, the agreement is already unraveling—and rare earths are the fault line. As reported by Bloomberg News (June 4, 2025), both sides are now accusing each other of violating the pact: the U.S. over new restrictions on Chinese tech firms, and China for failing to deliver on promised rare earth supply access.

At the core of the dispute is China’s April 4 decision to require export licenses for seven critical rare earth elements: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

These heavy rare earths are essential for defense systems, electric vehicles, semiconductors, and green energy infrastructure. The licensing regime is opaque, bureaucratic, and designed to tighten Beijing’s already dominant grip—controlling over 90% of rare earth processing capacity worldwide.

Markets initially rallied on the Geneva agreement. But Bloomberg now reports those hopes have dimmed as U.S. manufacturers face stalled shipments, and European and Indian industries report production line shutdowns. U.S. officials claim that China is leveraging its dominance in rare earths to extract additional concessions and delay agreed-upon reforms. Beijing, in turn, points to what it perceives as U.S. bad faith regarding semiconductor sanctions.

Trivium China analysts note the strategic calculus: Beijing views rare earths not just as commodities, but as a means of geopolitical leverage in a long-term “protracted economic war.”

Bottom line: Geneva was never peace—it was a pause. And rare earths are now the frontlines. The U.S. must treat this not as a trade spat, but as a national emergency in critical mineral security. Rhetoric won’t solve this. Domestic processing, allied supply chains, and industrial rearmament will.

Note that, as Rare Earth Exchanges (REEx) reported yesterday, President Donald Trump and China’s Xi Jinping, which purportedly went well, establishing what we predict will be an imminent China trip for Trump.

Source: Bloomberg News, “The Rare-Earth Fight Imperiling US-China Trade Peace, Explained (opens in a new tab),” June 4, 2025