Beijing's rare earth leverage forces Trump into softer stance ahead of Xi summit

Rare earth minerals, not tariffs, are setting the tone ahead of Thursday's Trump-Xi summit at the White House. Analysts say Beijing's near-total control of rare earth mining and magnet production, exposed when China curbed exports last year and rattled global markets, has forced Washington to soften its usual pre-summit brinkmanship. Recent US moves against China, from Pentagon warnings to import bans, have been quieter and timed to avoid provoking Beijing further. The pattern echoes past summits, where Trump threats gave way to concessions. Experts say the truce holds only until the US secures alternative critical mineral supplies..By Alexandra Alper for Reuters.US President Donald Trump has taken a less combative approach than usual ahead of his meeting with Chinese President Xi Jinping this week — a sign of Beijing's growing power thanks to critical minerals, China experts said.The Trump administration has so far not threatened to slap steep tariffs on Chinese imports or to ban exports of US technology, in contrast to the aggressive stances that preceded previous summits.The reason, experts said, is largely due to China's near-total control of rare earth minerals, a key input for tech and auto manufacturing. Last year, in retaliation against Trump's tariffs, China curbed rare earth exports and sent shockwaves through world markets. The move effectively imposed a limit on how much Washington can threaten Beijing, empowering China in its years-long tech war with the United States, experts said."The US and the Trump administration are just fundamentally in a different position with China where they can't use that overly coercive, over-reaching approach, knowing that they are going to walk some stuff back, because of everything that happened last summer and because of the rare-earth export controls," said Emily Kilcrease, a former trade official now at the Center for a New American Security think tank.The White House, the Commerce Department, United States Trade Representative and the Chinese Embassy in Washington did not immediately respond to requests for comment.China controls up to 70% of global rare-earth mining, 85% of refining capacity, and about 90% of rare-earth metal alloy and magnet production, according to consultancy AlixPartners.Rare earths, such as yttrium and dysprosium, underpin strategic industries such as automakers, chipmakers and defense contractors, representing a critical chokepoint in supply chains.Trump and Xi are scheduled to meet at the White House on Thursday followed by a state dinner attended by key officials and CEOs. The Trump administration has recently taken some actions against China, but experts said they were not as aggressive as previous threats and were unveiled months before the summit, likely to avoid antagonizing Beijing. For instance, the Pentagon in June accused Alibaba, BYD and other companies of aiding the Chinese military. In July, Treasury Secretary Scott Bessent threatened sanctions against any Chinese AI company copying US AI models. That same month, the US banned imports from 43 Chinese companies over alleged human rights abuses and imports of new foreign robots and power inverters, targeting China. "They're keeping the boil low enough that China won't take really severe retaliatory action," said Peter Harrell, a White House official under former President Joe Biden.After the "rare earths blowup," the Trump administration "feels vulnerable to Chinese coercion" and is seeking "stability and secure access to critical minerals," he added. .TRADE AND TECH WARThe US and China have been locked in a trade and tech battle since Trump's first term in office, with tensions soaring often ahead of summits and plunging immediately after.An early example played out during Trump's 2019 meeting with Xi in Osaka, Japan, when Trump walked back threats to impose tariffs on $300 billion of Chinese goods and ease up export curbs on Chinese telecoms giant Huawei after China agreed to make an unspecified number of purchases of US agricultural goods. .Nearly a year ago, in an October 2025 meeting in Busan, Trump lowered tariffs by 10% and shelved export controls on thousands of Chinese companies, when Xi agreed to suspend rare earth controls and resume purchases of US soybeans, leading both sides to declare the summit a success. Trump did, however, revert to big trade threats ahead of his meeting with Xi in Beijing this May, when he said he would impose a new 50% tariff on China, following a report that Beijing was planning to deliver new air defense systems to Iran..Read more:.China's rare earths weapon is losing its bite as global supply expands: David Fickling.Republican lawmakers such as John Moolenaar, who chairs the House of Representatives China Select Committee, heralded recent actions by Washington ahead of next week's meeting. "President Trump is heading into the summit from a position of strength," he said in a statement to Reuters.But Dmitri Alperovitch, co-founder of CrowdStrike and Silverado Policy Accelerator, a Washington-based geopolitical think tank, forecast less aggressive action from Washington until it can develop alternate supplies of critical minerals."Since Busan last year there is an uneasy truce that I think will be maintained," he said at an event last week about US-China competition. .SOURCE: REUTERS.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

Beijing's rare earth leverage forces Trump into softer stance ahead of Xi summit

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China's rare earths weapon is losing its bite as global supply expands: David Fickling