Top trade officials from the United States and China will meet in London on June 12, 2025, to discuss easing tensions between the two nations.

The talks come amid disputes over China’s dominance in rare-earth minerals, which are essential for various industries.

This meeting follows a failed attempt in Geneva in May to de-escalate the ongoing trade war.

Both sides have accused each other of not upholding the terms discussed during that meeting, which has further strained relations.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Rare earth supply dominance provides China with strategic leverage

China’s current control of approximately 69% of global rare earth production represents a dramatic shift from just three decades ago, creating significant geopolitical leverage in trade negotiations.

The US Geological Survey data shows that China’s share of global rare earth production surged from 38% in 1993 to over 90% by 2008, before settling at current levels1.

This dominance is particularly consequential because rare earth elements are critical components in technologies vital to national security and economic development, including electric vehicles, smartphones, and military guidance systems2.

The Mountain Pass mine in the United States represents one of the few non-Chinese sources of these materials, highlighting the limited alternatives available to manufacturers dependent on these critical minerals3.

China’s ability to restrict rare earth exports has been demonstrated before, most notably during the 2010 Rare Earths Crisis when export restrictions to Japan caused global prices to spike dramatically, providing a precedent for current tensions3.

2️⃣ The evolution of US-China trade disputes from tariffs to strategic supply chains

The current rare earth dispute represents a significant evolution in US-China trade tensions, which have expanded beyond traditional tariff battles to include strategic control over critical supply chains.

Recent actions include China’s restrictions on essential minerals and the US suspending sales of components and software for jet engines and semiconductors to China, demonstrating how trade disputes now target vulnerabilities in each nation’s industrial capabilities4.

This shift has created what analysts describe as a “new era of trade warfare” where interdependence in manufacturing has become both a vulnerability and a source of leverage for both nations4.