- (Analysis) Critical Minerals and the U.S.–China Strategic Playbook - 20 July, 2026
- New Normal of Deliberate Escalation Between India and Pakistan - 30 March, 2026
Over the past year, diplomacy around rare earth supply chains has reoriented into a more consequential phase as technology is compelling states to adopt strategic adaptability. In this context, critical minerals constituted an economic chokepoint for negotiations between U.S. President Donald Trump and Chinese President Xi Jinping at the May 2026 Summit in Beijing. Following the meeting, the White House regarded the outcome as a new constructive bilateral partnership between the two countries. However, on June 22, 2026, China imposed export restrictions on several American companies, including two major rare-earth enterprises, USA Rare Earth and MP Materials. This regulatory move came in response to the Pentagon’s expansion of its blacklist of Chinese corporations identified as supporting the Chinese military, including over two dozen new companies such as Alibaba Group, Nio and Baidu. Hence, tariff hikes and tit-for-tat exchanges of export controls are driving deeper global competition over critical minerals.
Source: Official White House Photo by Daniel Torok
The 2026 Iran War and Rare Earth Elements
In modern warfare, high-performance materials are integrated into air defense, guidance, and surveillance networks. Among these materials, rare earth elements (REEs) constitute a group of seventeen metallic elements. REEs, a subset of critical minerals, are indispensable to the digital infrastructure, defense capabilities, semiconductors, artificial intelligence (AI) and green technologies. The greater challenge for REEs is finding economically viable reserves, followed by processing, refining, smelting, and isolating them into functional forms. Recently, the Iran War has redefined the significance of critical minerals in the deterrence equation and in the rapid replenishment of military arsenals and inventories. They are now determining the state’s strategic readiness and capabilities to sustain long-term combat.
Undoubtedly, the conflict has intensified mineral resource competition between Washington and Beijing to solidify their respective positions in an international order. On March 1, 2026, one day before striking Iran, the U.S. Department of War requested Defense Industrial Base Consortium (DIBC) members for proposals to expand supplies of 13 critical minerals used in semiconductors, weapon systems, and defense supply chains. This development signals that possessing reserves and mines but lacking processing capabilities makes a state weaker. The true measure of state power is the ability to control all high-value stages, including mining, manufacturing, refining, assembly, storage, and distribution under interruption. This clearly points to where Beijing’s structural advantage lies.
China’s Critical Minerals Chokehold
According to the International Energy Agency (IEA), China is a rare-earth giant, accounting for almost 90 per cent of refining and about 95 per cent of permanent magnet manufacturing. To begin with, the reserves of REEs are not exclusive to any single country. They are geographically dispersed across various countries, including Australia, Brazil, Greenland, Indonesia, Kazakhstan, the United States, Ukraine, and Russia. However, China leads the way when it comes to mineral purification, synthesis, fabrication, and industrial assembly. Therefore, China’s strength originates from its expertise in both mining and the post-mining phases. Beijing’s market dominance of critical minerals did not occur overnight; rather, it is the product of a decades-long strategy. Chinese policymakers classify key minerals as dual-use items, implying they can serve both military and civilian objectives. From 2000 to 2021, Beijing invested over $57 billion in mineral extraction and refinement across Africa, Asia and Latin America. In contrast, Washington closed the U.S. Bureau of Mines in 1996, and by 2024, the U.S. accounted for only 1 per cent of global production of critical minerals.
China has escalated its use of export controls after encountering volatile moments with the U.S. last year. On April 2, 2025, the Trump administration imposed global tariffs, with the maximum rate of 145 per cent applied to Chinese goods. In retaliation, China imposed export curbs on REEs. Following many rounds of discussions, the two parties decided on a 90-day trade truce in August 2025, which would end in November 2025. Before the Asia-Pacific Economic Cooperation (APEC) summit, China expanded its export restrictions on October 9, 2025, on five new rare-earth elements in addition to the seven announced in April 2025. Following the APEC meeting between Trump and Xi in Busan, South Korea, on October 30, 2025, the truce was extended for a full year. Similarly, China lifted its export embargo on five critical minerals to the U.S. on November 9, 2025. Beijing also removed retaliatory restrictions on the exports of super-hard commodities such as antimony, germanium, and gallium placed in December 2024. These developments hint at new harsh regimes of export controls willing to weaponize the supply chain of rare earths.
Source: Abdul Basit on Unsplash
U.S. Strengthening Mineral Security Framework at Home
Domestically, the U.S. has introduced a series of ambitious policy actions aimed at antagonizing China and accelerating local production of key minerals. These efforts include expanding public sector participation in enterprises extracting and refining REEs, investigating price support mechanisms, and improving inter-agency coordination. These initiatives are built upon earlier acknowledgement by the first Trump Administration in 2019 that the domestic industrialization of critical minerals is essential to national defense. This objective was also reinforced by the introduction of the bipartisan bill ‘Restoring American Mineral Security Act of 2025’ on September 17, 2025, aimed at combating foreign influence on value supply chains.
On February 2, 2026, the White House officially announced Project Vault, a $12 billion public-private strategic alliance designed to store and secure critical minerals reserves across the U.S. in the event of supply chain disruptions. On February 4, 2026, Washington also held the inaugural Critical Minerals Ministerial event, with delegates from over 50 countries and the European Commission in attendance. During the event, the State Department presented the framework of the Forum on Resource Geostrategic Engagement (FORGE), successor to the 2022 Biden-era Minerals Security Partnership (MSP). Concurrently, the Developing Overseas Minerals Investments and New Allied Networks for Critical Energies (DOMINANCE) Act, introduced on January 13, 2026, and passed by the House of Representatives on June 8, 2026, aims to reduce Washington’s dependency on strategic competitors for rare earths.
Source: Official State Department photo by Freddie Everett
America’s International Efforts: Rise of Mineral Alliances
Internationally, Donald Trump is taking vigorous steps to offset Chinese influence by signing bilateral partnership deals and agreements with like-minded countries. In early 2026, Trump’s campaign to seize control of Greenland, a strategically placed Arctic Island, was motivated by his ambition to control the undiscovered riches of rare earth minerals. By May 2026, the White House confirmed that the U.S. State Department had signed 27 bilateral critical minerals agreements during the previous 12 months. One prominent example is the mining deal reached on April 30, 2025, between the United States and Ukraine to share profits from the future sale of key mineral reserves, including vast titanium and lithium resources.
On his way to a meeting with Chinese President Xi in October 2025, Trump signed important minerals agreements with Australia, Cambodia, Japan, Malaysia, Thailand, and Vietnam. These partnerships included guarantees to invest in mineral processing, minimum price floors to encourage production, and curbs on export restrictions. Among these, the U.S.-Australia agreement announced on October 20, 2025, was noteworthy since it focused on securing key minerals for defense and technology. Under the agreement, a 100 metric ton-per-year advanced gallium refinery in Western Australia will be backed by the U.S. Department of War.
Source: Official White House Photo by Daniel Torok
On October 23, 2025, the Orion Critical Mineral Consortium was established by investment firm Orion Resource Partners, with the goal of developing alternative supply chains for REEs. With a $5 billion target, the fund is supported by the U.S. International Development Finance Corporation (DFC) and the Abu Dhabi-based investment company ADQ. As part of landmark Gulf partnerships, the United States and Saudi Arabia also struck a critical minerals deal on November 19, 2025. The U.S. Department of Defense and MP Materials are funding and aiming for a 49 per cent equity stake in a joint venture with a Saudi mining company to build a rare earth processing facility.
Despite an outward-looking strategy, increasing engagement with politically vulnerable countries increases the likelihood of project delays and operational disruptions. For example, the Reko Diq copper-gold project in Pakistan’s Balochistan province, supported by around $1.3 billion in funding from the U.S. Export-Import (EXIM) Bank, is experiencing increased volatility. Other conflict-prone areas, such as the Democratic Republic of the Congo and Ukraine, have similar risks. Moreover, these new U.S.-led mineral partnerships may attract additional attention from China, resulting in punitive measures that could further destabilize supply chains.
Conclusion
In the twenty-first century, critical minerals, a strategic resource, have emerged as a decisive arena of the international system. In the broader geopolitical rivalry, the emerging strategic competition is about acquiring resources and influencing the institutions and balance of power in the next global age. Since January 2025, the Trump administration has prioritized gaining access to critical raw resources at the center of its national security and geoeconomic agenda. In the short term, China is strategically weaponizing its critical minerals resource dominance to achieve tariff reductions at the negotiation table. But in the longer term, aggressively leveraging rare earth contests could amplify the supply chain diversification efforts by the U.S. and its allies.
The expanding market for critical minerals is adapting to substantial restructuring, such as increased demand signals and extraction volumes at both present and new locations. The United States can capitalize from deep capital markets, evolving global partnerships, top research institutions and a competitive innovation ecosystem. Nonetheless, current regulatory initiatives remain primarily concerned with developing traditional mining and processing capacities, but this process can take years, if not decades. Consequently, if the U.S. wants to overturn China’s dominance, it should adopt a comprehensive approach by encouraging disruptive innovation and recovery capable of defending against future supply shocks.
Another significant yet overlooked dimension is the growing resource nationalism among mineral-rich countries in the Global South. On June 17, 2026, leaders of the Group of Seven (G7) decided to reduce reliance on any single dominant supplier of REEs and permanent magnets to less than 60 per cent by 2030, with a final target of 50 per cent. Such developments reflect a deeper reality: the struggle for critical minerals is no longer solely a conflict between Washington and Beijing. Rather, the shifting landscape of rare earths should be characterized by a triangular relationship between different actors with competing interests in the supply chains.
Further Readings
image sources
- 55272578225_5cfca8668a_o: Official White House | Public Domain Mark 1.0
- abdul-basit-1O_HNWeY0O4-unsplash: Unsplash | CC0 1.0 Universal
- 55078306303_65135a1895_o: Official State Department | Public Domain Mark 1.0
- 54875383959_5eb9017b51_o: Official White House | Public Domain Mark 1.0
