Why Chinas mineral monopoly has emerged as key obstacle in US tariff talks: They hold virtually all of the cards

China’s exploitation of its monopoly over rare earth elements has become a major sticking point in high-stakes trade talks with President Trump – and experts warn the US needs to prepare for the worst.Beijing has infuriated Trump officials by failing to loosen its crackdown on exports of seven “heavy” rare earth metals which are essential for gadgets like smartphones and electric cars as well as military hardware like F-35 fighter jets and drones.On Friday, Trump fumed that China had “totally violated” the terms of a preliminary trade agreement struck in Geneva, which included a 90-day tariff truce that runs until mid-August.

Trump didn’t elaborate, but US Trade Representative Jamieson Greer said one concern was that China “continues to, you know, slow down and choke off” the flow of critical minerals to the US.Treasury Secretary Scott Bessent on Sunday said Trump and Chinese President Xi Jinping will speak soon to iron out the trade issues including the dispute over critical minerals.“What China is doing is they are holding back products that are essential for the industrial supply chains of India, of Europe.And that is not what a reliable partner does,” Bessent said in an interview with CBS’ “Face the Nation.”“They are withholding some of the products that they agreed to release during our agreement — maybe it’s a glitch in the Chinese system, maybe it’s intentional.

We’ll see after the President speaks with the party chairman.”Nonetheless, any talk from China of a trade truce is “little more than window dressing,” according to longtime mining executive Mark A.Smith, whose firm NioCorp has a rare earths facility under development in Nebraska.“China is strategically choosing minerals for export restrictions that have a disproportionate impact on our military readiness and national defense,” Smith said.

“They hold virtually all of the cards.”Since 2023, China has implemented export controls on at least 16 crit...