U.S. and China Face Off in London Over Rare Earth Minerals and Supply Chains

On Monday, official delegations from the United States and China met in London to negotiate the future of rare earth mineral exports.

According to customs data, China’s rare earth exports rose 23% in May to 5,865 tons, recovering from April’s 4,785 tons but still trailing last year’s 6,217 tons.

This surge followed months of tension after Beijing imposed export restrictions on select rare earth elements and magnets in April, disrupting global supply chains for industries like automotive, electronics, and defense.

The talks, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, focus on export controls rather than tariffs. The Trump administration wants China to speed up shipments of rare earths and magnets, which are essential for manufacturing cars, electronics, and military equipment.

China, meanwhile, seeks the removal of US restrictions on semiconductors, jet engines, and advanced software. Both sides accuse each other of violating a trade truce reached in May in Geneva.

The US claims China has slowed rare earth shipments, threatening American manufacturing. China argues the US breached the agreement by tightening controls on high-tech exports to Chinese firms.

The dispute has already forced some European auto parts factories to halt production, while semiconductor manufacturers warn of looming shortages. China dominates the rare earth market, supplying about 70% of mined rare earths and processing 85% of global output.

The US, heavily reliant on these imports, faces risks if supply disruptions continue. In the first five months of 2025, China exported 24,827 tons of rare earths, a slight increase from the same period last year, but the mix of products remains unclear until further data is released.

Despite a recent gesture from Beijing to approve some export licenses, industry sources do not expect China to lift all restrictions. These controls give China leverage in negotiations and help manage its strategic resources.

The US, meanwhile, is pushing to restore the flow of critical minerals to pre-April levels, aiming to protect its manufacturing and defense sectors from further shocks.

The outcome of the London talks will shape the future of global supply chains and determine how both countries secure access to materials vital for their economies and security. The stakes remain high for businesses and governments worldwide.