As Donald Trump prepares for high-stakes talks with Chinese President Xi Jinping, America’s dependence on China for critical minerals remains a major vulnerability in Washington’s negotiating position. Despite efforts to build a domestic supply chain, the United States has yet to overcome Beijing’s dominance in rare earth mining and advanced processing.
The Trump administration has introduced several initiatives, including billions of dollars in public-private funding, equity investments in mining companies such as Trilogy Metals and Lithium Americas, and Pentagon-backed processing partnerships with firms like MP Materials.
However, many domestic mining projects remain years away from full production, leaving American manufacturers dependent on Chinese supplies essential to semiconductors, robotics, weapons systems and artificial intelligence.
The Massive Capacity Gap
China’s annual production capacity for neodymium-iron-boron magnets stands at approximately 210,000 metric tons, compared with around 4,500 metric tons in the United States.
Building a complete domestic supply chain requires years, if not decades. Major projects, including Thacker Pass and Perpetua Resources, are targeting production around 2028 and 2029, respectively, while several major copper developments are expected to expand by 2031. Even existing domestic capabilities face challenges integrating into complex industrial supply chains.
Beijing’s Leverage at the Negotiating Table
China’s dominance gives Beijing considerable leverage because America’s defence, automotive and technology industries continue to rely on Chinese materials.
Previous Chinese export restrictions on rare earths and magnets disrupted production at manufacturers such as Ford, demonstrating the vulnerability of American supply chains.
Ahead of the Trump-Xi summit, expected on Thursday, the two leaders may seek to extend their fragile trade truce, which is due to expire in January and includes export-control waivers for certain critical minerals.
“The Chinese have been using the critical minerals choke collar on the US when they feel like it,” said Rich Nolan, head of the National Mining Association.
The gap between Trump’s ambitions and the slow pace of implementation highlights the challenges of rebuilding an industry the United States largely abandoned toward the end of the 20th century, said Samir Kapadia, head of trade at the Vogel Group.
China maintains that its export restrictions are intended to prevent military use of the minerals, while accusing Washington of misusing export controls to restrict semiconductor shipments to China.
Beyond mining, Beijing has spent decades developing the processing facilities, technical expertise and manufacturing infrastructure needed to turn raw materials into industrial components, reinforcing its position in global supply chains.
