Xi-Trump Summit Confronts China’s Rare-Earth Leverage Amid Ongoing Trade Truce

U.S. President Donald Trump and Chinese President Xi Jinping are slated to meet this week for a high-stakes summit. The talks arrive as a one-year rare-earth trade truce, established after a series of tariff escalations, approaches its expiration in November. China’s ability to restrict rare-earth shipments—critical for electronics and defense—remains a central bargaining chip, while the United States seeks to mitigate its material vulnerabilities.

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The dispute traces back to April 2025, when the Trump administration imposed broad tariffs that prompted China to launch its own rare-earth export controls. Subsequent negotiations produced the current truce, which both sides view as mutually beneficial. In parallel, the U.S. has launched an aggressive campaign to diversify supply chains, yet analysts note that the effort has yet to substantially reduce dependence on Chinese inputs.

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• Bloomberg Economics projects that China will continue to dominate the rare-earth supply chain—from mining through magnet production—until at least 2030.

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• Former National Security Council directors Chris Kennedy and Jennifer Welch estimate that, even if announced projects proceed on schedule, U.S. reliance on Chinese rare-earths is likely to persist into the early-to-mid-2030s.

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• Recent shipments of Chinese rare-earth magnets to the United States fell again in August, underscoring the fragility of the supply line.

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U.S. Trade Representative Jamieson Greer characterized China’s export performance as receiving only a “passing grade.” Chris Kennedy emphasized that inter-stage dependencies—such as magnet production in Japan that still relies on Chinese inputs—must be unwound, and he anticipates a three-to-six-month extension of the truce. Defense officials have been urged to accelerate weapons production and to cease sourcing rare earths from China by the start of the new year, reflecting heightened military concerns amid the Iran conflict.

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• “Neither side wants to blow this up,” — Cory Combs

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