Commentary: Why Rare Earths Could Be a Rare Bridge in U.S.-China Relations

The intensifying strategic competition between China and the United States has elevated rare earth elements to a critical position, symbolizing both a resource of contention and a potential avenue for dialogue. Rare earths are vital to strategic industries such as new energy, defense, and semiconductors, making them essential in discussions of supply chain security, national self-sufficiency, and national security for both powers [para. 1]. Their role in bilateral relations is dual-faceted: rare earths act as leverage in power dynamics, while their status as global public goods offers limited but crucial space for institutional dialogue amidst a climate of mistrust and confrontation. The potential for cooperation in such sectors underscores their importance as both a risk and a channel for communication [para. 2].

Recent trade talks in London highlighted rare earths as a focal topic. China agreed to expedite approvals for rare earth shipments to non-military U.S. entities, aiming to stabilize tech sector supply chains, while the U.S. displayed flexibility in technology exports to China. This negotiation, differing from previous tit-for-tat exchanges, marked a cautious move toward institutionalized engagement and reflected mutual interests in mitigating security risks and achieving limited but meaningful agreements [para. 3]. Rare earths, highly strategic yet not easily fully weaponized, straddle the line between national security asset and global industrial necessity. Their management directly impacts not only U.S.-China relations but also global supply chain stability [para. 4].

Simultaneously, Western countries are actively working to reconstruct and secure their own rare earth industries to reduce dependence on China [para. 5]. In the U.S., the revival of the Mountain Pass mine—operated by MP Materials with support from the Department of Energy and Department of Defense—includes new facilities for processing neodymium-praseodymium alloys in California and Texas. The U.S. is also enhancing strategic mining cooperation with allied nations, including Canada, Australia, and Japan, to diversify its rare earth supply sources through the Minerals Security Partnership [para. 6]. Canada has achieved early commercial production at a rare earth processing center in Saskatchewan and is moving toward processing 1,000 tons of Nd-Pr annually. Additionally, Quebec is developing recycling and scandium extraction technologies, positioning Canada as both a resource supplier and processor [para. 7].

Australia, leveraging its resource wealth, has integrated rare earths into its national security strategy. Companies such as Lynas Rare Earths Ltd. operate significant rare earth refining capacities in Malaysia and Australia, aiming for a fully integrated supply chain [para. 8]. The European Union, Japan, and South Korea are also pursuing independent rare earth strategies: the EU legislated stronger support through the Critical Raw Materials Act and prioritized rare earth access in negotiations with China, while Japan and South Korea have signed supply agreements with Vietnam and Kazakhstan [para. 9].

These proactive measures suggest that Western nations are not merely stabilizing their rare earth access but transforming it into a point of strategic leverage and selective engagement within globalization [para. 10]. For China, the prudent approach is not to over-weaponize rare earths but to view them as platforms for dialogue, using institutional frameworks to sustain their global voice and maintain industry competitiveness. This balanced strategy can serve as a safety valve to mitigate international tensions [para. 11]. China’s rational, restrained, and institutional handling of the rare earth issue strengthens its position as both a resource provider and rule-maker, potentially shaping global order [para. 12].

Looking ahead, the rare earths dialogue offers a model that could be extended to other sensitive fields, fostering new risk management mechanisms essential for stability and peace in a fractious international environment. Although not an instant solution, these mechanisms could function as stabilizers in times of great-power rivalry [para. 13][para. 14]. Ultimately, rare earths represent not just competition for resources, but a foundational starting point for substantive international dialogue and crisis management [para. 15].