Trump and Xi to Discuss Rare Earth Truce Extension
Synopsis
President Trump and President Xi Jinping are set to discuss a rare earth truce this week, even as data shows China continues to throttle exports of minerals vital for defense and tech. Since April 2025, shipments of heavy rare earths like yttrium have dropped by 50%, sending global prices soaring and forcing some U.S. aerospace firms to pause production. While the U.S. and allies like Japan and Germany are racing to build new supply chains, experts warn that China still holds significant leverage over the world's high-tech manufacturing. The outcome of the Beijing summit will be a major test for global trade stability.
During the summit this week, President Trump and President Xi Jinping are considering a rare earth truce extension. Still, the new report reveals China is continuing to control deliveries of critical defence and high-tech manufacturing materials.
Key Highlights
- A truce on extremely rare export limits is being weighed between some U.S. and Chinese leaders.
- Although Chinese customs data shows shipments of heavy rare earths such as yttrium have remained 50% lower.
- China slapped controls on yttrium in April 2025
- Some U.S. aerospace firms have been temporarily stopping production due to a shortage.
- U.S. allies, including Japan and Germany, are undergoing even sharper supply reductions than the U.S.
The Beijing Summit
President Donald Trump and Chinese leader Xi Jinping are expected to discuss an extension of a moratorium on tariffs related to rare earth minerals during Wednesday’s summit in Beijing. Both sides voiced the necessity for stability, but it was unclear whether a formal extension would be completed during the visit or soon thereafter. The talks were in line with other big trade issues like possible Chinese purchases of U.S. energy, agriculture and Boeing aircraft.
Shortages and supply chains
More than two years after the agreement promised to substantially eliminate controls, China has kept tight caps on exports of repeatedly used core materials. China has essentially limited export licenses for key materials to retain an edge in the advanced technology and defence supply chains, experts say. Japan has received just 4% of its usual imports of dysprosium, and Germany none at all. They were originally imposed in retaliation for U.S. tariffs, but they further penalise global manufacturers reliant on access to China’s unique capacity to produce these minerals in scale.
Impact on Industry: Expert Take
Rare earths, some analysts now suggest that a global shortage is nearing crisis point. Several U.S. companies are said to have dealt hundreds of millions of dollars in monthly revenue serious blows from licensing delays, forcing White House intervention just to garner the appropriate approvals. But in contrast to the U.S., Japan, and Germany, which are pouring funds into new endeavours to reduce reliance on Chinese supply, experts say a complete substitute for those materials is years away. The price of magnets and specialty metals shows no sign of easing, say research directors at leading consultancies, meaning the plight is likely to worsen before it eases.
FAQs
- What are rare earth elements?
They are incorporated into electric car motors, electronics, fighter jets, and missiles as well as in many high-performance semiconductors.
- Why is China moving to restrict those exports?
Those controls were imposed in April 2025 in response to President Trump’s Liberation Day trade tariffs against China.
- How much have prices increased?
For materials such as dysprosium and terbium, prices have increased 4 to five times while yttrium outside of China has jumped a massive one hundred forty times.
- Are these minerals getting replaced by other sources in the U.S?
The U.S. and its G7 allies are shifting investments toward alternate supply chains, but these analysts warn that it will be years before China is no longer the world’s factory.
Follow Inspirepreneur Magazine for daily global business news.
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
You Might Also Like
Netherlands Warns About Coalition Scheme for Mortgages in Australia
India’s BYJU’S faces new legal setback after Singapore Court order
