Explained: How China gained rare earths dominance — and what it means for the US

China’s control over rare earth elements did not happen overnight. It is the result of decades of investment across every stage of the chain — from mining and reserves to processing and technology — giving Beijing significant influence in its trade dispute with Washington.

These 17 minerals are essential for defence equipment such as fighter jets, radar systems and missile guidance, and are also used in smartphones, medical tools and cars.

Inside the rare earths hub of Ganzhou

According to news agency AFP reporters who visited Ganzhou this month, found the heavy rare earths region buzzing with activity despite tight surveillance.




The area produces elements like yttrium and terbium, and the agency reporters witnessed trucks moving in and out of mines and busy processing plants.

The city is also constructing new headquarters for China Rare Earth Group, one of two major state-owned players formed after years of government-led consolidation.

Economics lecturer Heron Lim told AFP that recent disruptions have encouraged more countries to consider expanding their own production, adding that such moves “could pay longer-term dividends.”

Trade tensions push rare earths to centre stage

China’s export restrictions announced in early October shook global manufacturers and alarmed Washington, which is locked in a renewed trade war with Beijing under President Donald Trump’s second term.

After talks in South Korea, Trump and Chinese President Xi Jinping agreed to a one-year truce that temporarily secures supplies of rare earths and other minerals — a development widely viewed as favourable to Beijing.

Lim said rare earths would likely remain central to future negotiations, noting that China has shown it is prepared to use trade tools to keep the US engaged. He added that the uncertainty has created difficulties for industries dependent on these metals.

Why the US fell behind

During the Cold War, the United States led the rare earths industry, with the Mountain Pass mine in California supplying much of the world.

But as relations with Moscow improved and environmental concerns grew, the US shifted production overseas through the 1980s and 1990s.

China now accounts for about two-thirds of global mining and roughly 90% of processing, according to analysis cited by AFP. It also holds the world’s largest reserves and leads in patents, supported by strict export controls on processing technology.

Commodities analyst Amelia Haines was quoted by AFP as saying that the heavy reliance on imports poses “significant risks to critical industries,” which could accelerate a broader push for mineral security.

America and allies search for alternatives

The US has been attempting for years to rebuild its rare earths capacity. Defence agencies have invested heavily to establish a full “mine-to-magnet” chain by 2027.

Washington has also signed critical minerals agreements with allies including Australia, Japan, Malaysia and Thailand.

Trump recently announced an $8.5 billion rare earths partnership with Australian Prime Minister Anthony Albanese.

This urgency is not new. In 2010, China briefly halted rare earth shipments to Japan during a territorial dispute, highlighting the geopolitical stakes.

The Obama administration called for strengthening US resilience, yet 15 years on, China remains the dominant force in the sector.

Get an chance to win ₹5000 Amazon Voucher by taking part in India's Biggest Habit Index! Take the survey here