Highlights
- U.S.-China rare earth agreement offers temporary six-month export relief, maintaining significant tariffs and strategic complexities.
- Global rare earth supply remains dominated by China, with critical gaps in heavy rare earth processing and independent refinery capabilities.
- Diversification efforts through projects like MP Materials and international refineries aim to reduce dependency, but structural challenges persist.
Henry Rivers’ AI Invest (opens in a new tab) recent take on the June 2025 U.S.-China rare earth agreement is punchy and urgent, but for retail investors trying to navigate this volatile sector, the glossy packaging conceals deeper risks. Yes, the deal offers temporary relief—China has agreed to resume exports of seven rare earth elements, including critical inputs like neodymium and samarium. These are essential to everything from electric vehicle motors to advanced missile guidance systems.
But let’s not confuse short-term license windows and selective tariff rollbacks for lasting détente. The AI Invest piece, at least, emphasizes the risk. The agreement offers only six months of guaranteed flow, with the U.S. maintaining a punishing 55% tariff on Chinese goods. Beijing, in turn, keeps its 10% levy but sweetens the pot with “green channels” for politically favored firms—further proof that China is scripting the terms of engagement.
Rivers rightly highlights the real-world impact of these moves: MP Materials surged on news of ramped-up production at its Pentagon-backed Texas magnet plant, a vital step in restoring domestic capacity. His overview of diversification efforts—from Eneabba’s refining expansion (opens in a new tab) in Australia to Neo’s magnet factory in Estonia—is also on point. These projects, in theory, reduce dependency on Chinese refining and processing, which still accounts for 90% of global capacity.
But the analysis falters where it matters most. Rivers breeze past China’s continued dominance of heavy rare earths, particularly ion-adsorption clays found in southern provinces and Myanmar. These are indispensable for radar systems and next-gen weaponry—yet completely absent from his supply-chain calculus. He also assumes a commercial readiness for recycling technologies like HPMS and separation innovations like RapidSX that haven’t been proven at an industrial scale.
More glaring still is what’s left unsaid. Rivers makes no mention of illegal rare earth flows—especially from Myanmar into China—that continue to destabilize global supply metrics. He offers no price sensitivity analysis for neodymium-praseodymium (NdPr) or dysprosium-terbium (DyTb), despite their highly volatile response to even the slightest hint of trade friction. And while he champions refinery builds, he neglects to address the West’s ongoing struggles to convert oxides into usable metals on a large scale.
In the end, this article reads like a strong opening note for generalists, but Rare Earth Exchanges readers know better. In this space, metallurgy matters, logistics rule, and peace deals are just intermissions in a longer economic war. Yes, diversify your positions. Yes, track MP, Lynas, and Neo. But never confuse temporary access with structural independence.
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