“They’re going to deliver rare earths to us,” U.S. Commerce Secretary Howard Lutnick said in an interview on June 27. “And once they do that, we’ll take down our countermeasures.”
Mr. Lutnick’s remarks came just a day after a White House official confirmed that the U.S. and China had reached “an additional understanding” to implement the Geneva agreement — a deal reached on May 12 that had paused new tariffs for 90 days and set a mid-August deadline for further talks.
Soon after, U.S. President Donald Trump announced that Washington had signed an agreement with Beijing. He offered few details but hinted at a possible deal with India in the near future. China also confirmed the agreement. These announcements were the first formal confirmation of a partial breakthrough after months of escalating trade and technology tensions between the world’s two biggest economies.
The recent developments came after high-level delegations from both countries met in London on June 9 and 10 for two days of negotiations. The talks, which lasted for more than 20 hours, were led on the American side by Treasury Secretary Scott Bessent, Commerce Secretary Lutnick, and U.S. Trade Representative Jamieson Greer, while the Chinese delegation included Vice Premier He Lifeng, Commerce Minister Wang Wentao, and chief trade negotiator Li Chenggang.
The focal point of the talks was one mineral group: rare earth elements (REEs) — a strategic mineral group critical to both economies.
The 17 rare elements
Often described as the “vitamins of the modern economy,” it is a group of 17 chemically similar metallic elements. These include 15 silvery-white metals called lanthanides, or lanthanoids, plus scandium and yttrium, which are indispensable to a range of civilian and military applications, from electric vehicles and wind turbines to radar systems, precision-guided weapons, and stealth aircraft. REEs are not finished magnets or minerals, but raw elements extracted from complex ores and later processed into specialised materials.
Despite their name, REEs are not geologically scarce, rather, their extraction and processing is expensive, complex, and hazardous to the environment.
The 15 lanthanide elements include lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium (atomic numbers 57–71). Scandium and yttrium, though not lanthanides, are often grouped with REEs due to their similar properties.
Neodymium and praseodymium are used in powerful magnets that run electric vehicle motors and wind turbines. Europium is used in LED displays. While cerium and lanthanum are employed in catalytic converters, glass polishing, and camera lenses, samarium and dysprosium are essential in high-performance magnets and defence systems. Gadolinium has applications in MRI machines, while other REEs play a role in lasers, batteries, and fibre-optic cables.
REEs are divided into two categories: light rare earths (from lanthanum to gadolinium) and heavy rare earths (from terbium to lutetium). Light REEs are widely used in consumer electronics, batteries, and industrial applications, while heavy REEs are more valuable due to their specialised uses, limited supply, and crucial role in military, nuclear, and high-performance magnet applications.
What sets REEs apart are their unique magnetic, luminescent, and chemical properties.
Origin, process of refining
REEs are not found in pure form like gold or copper. Instead, they are typically dispersed in mineral ores, such as bastnäsite and monazite. Once mined, they undergo a complex, multi-step process: the ore is crushed, chemically leached, and then separated through solvent extraction to isolate individual elements. These are then refined into metals or oxides used in high-performance magnets, batteries, and defence systems.
While deposits exist in many parts of the world, China dominates the rare earth supply chain — not because it holds the most reserves, but because it invested early in large-scale refining infrastructure. According to the U.S. Geological Survey (USGS), China accounts for nearly 70% of global REE mining and more than 90% of refining capacity.
The country’s rare-earth journey dates back to 1927, when scientists discovered major deposits in Bayan Obo in Inner Mongolia. Production began in 1957, and over time, deposits have been located across 21 provinces and autonomous regions, from Fujian and Guangdong to Jiangxi and Sichuan.
The choke point
While rare earths are often discussed in terms of green energy and electronics, their military importance is equally, if not more, critical. Samarium-cobalt magnets, for instance, remain stable at high temperatures and are vital to precision weapons. Dysprosium strengthens magnets used in stealth aircraft. Yttrium and terbium enhance night vision and targeting systems.
This military dependence is precisely why recent export curbs by Beijing rattled Washington.
The London talks resulted in limited but noteworthy progress. China agreed to expedite the review and approval of thousands of export applications from manufacturers in the U.S. and to create a “green channel” for trusted American firms. However, the deal did not cover military-grade materials, which are a key concern for the U.S.
According to a Reuters report, Beijing has not committed to grant export clearance for some specialised rare-earth magnets that U.S. military suppliers need for fighter jets and missile systems.
Beyond China
Hence, the U.S. is actively seeking alternative resources for rare earth elements.
The Mountain Pass mine in California currently supplies over 10% of the world’s rare-earth raw materials. However, much of the ore still has to be sent to China for processing, due to the lack of domestic refining infrastructure.
This has prompted a broader outreach beyond U.S. borders.
In Greenland, the vast Kvanefjeld deposit, ranked among the world’s top three rare earth sites outside China, could alone supply up to 15% of global demand for REEs. Though part of the Kingdom of Denmark, Greenland is self-governing and controls its own natural resources, including some of the world’s largest reserves of rare earth, lithium, cobalt, and uranium — all critical to the clean energy transition and modern defence technology.
However, Greenland lacks processing infrastructure.
Greenland’s Minister for Business, Trade and Raw Materials, Naaja Nathanielsen, in a BBC report, said that interest in the territory’s minerals has “absolutely increased within the last five years or so.”
Meanwhile, Mr. Trump even floated the idea of acquiring Greenland, calling it essential “for national security and international security.” During a joint session in Congress in March, he said, “We strongly support your right to determine your own future, and if you choose, we welcome you into the United States of America. We will make you rich.”
Ukraine, too, holds enormous potential. According to USGS, the country has 5,00,000 tonnes of lithium in its reserves, 20% of global graphite reserves, and significant supplies of neodymium and other high-tech metals.
As part of ceasefire negotiations, Russian President Vladimir Putin had hinted that rare earth reserves in the territories Russia captured during the war could be opened to global markets. However, a source who spoke to the South China Morning Post remains sceptical, citing damage on the ground and Ukraine’s lack of refining capacity as major hurdles to replacing China’s dominance.
“Even if Washington manages to strike a deal, war damage and population displacement from the war would make extraction tough,” he said. He also expressed doubts over how reliance on Ukraine would dislodge China’s place from that global supply chain, given that the processing capabilities in any market are going to struggle to match what China currently offers.
Other possible locations, according to USGS are: Australia, Brazil, Russia, India, Vietnam, and Canada, as well as African nations like Madagascar, Tanzania, South Africa, and Burundi.
Parallel to these efforts, the U.S. is also investing in recycling rare earths from used electronics and magnets.
For now, all the talk and frameworks offer a temporary easing of tensions — a narrow civilian corridor in a broader landscape of unresolved disputes. With military-grade materials still off the table, the deal falls short of a reset. And unless the U.S. and its allies significantly ramp up investments in rare earth processing infrastructure, China’s dominance will remain not just an economic asset but a powerful geopolitical lever.