Critical minerals give China an edge in trade negotiations

China’s dominance over critical minerals in global supply chains was a powerful negotiating tool in trade talks between Beijing and Washington, which concluded with both sides stating they have a framework to seek a deal. China has been building the world’s leading industrial chain for decades for mining and processing these materials, which are used in many industries such as electronics, advanced manufacturing, defense and health. Mines and factories in and around Ganzhou, a key production hub for rare earths, underpin China’s control over the minerals. Many residents grew up collecting rocks containing the valuable minerals from the forested hills surrounding the southern city and today make a living by mining, trading, or processing them.

Critical minerals as a trade issue

In response to increasingly high tariffs and other controls on advanced technology, China directed exporters of certain key rare earths and other critical minerals to obtain licenses for each overseas shipment. Permits can take weeks, leading to supply chain disruptions in the U.S. and other countries. U.S. President Donald Trump said on Wednesday that China would make it easier for U.S. industry to source much-needed rare earth magnets and minerals, paving the way for talks to continue between the world’s two largest economies. In return, Trump said the U.S. will halt efforts to revoke visas for Chinese nationals on U.S. college campuses. But details remain scarce. Beijing has not confirmed what negotiators agreed, and Chinese President Xi Jinping and Trump himself have yet to give their approval.

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