They are used to do countless things on crucial objects in our daily lives
The trade deal between the US and China seeks to resolve one of the main sticking points in the current trade war: rare earth minerals.
Despite multiple rounds of talks with U.S. trade negotiators over the past few months, China continued to delay promises to the Trump administration that it would release crucial rare earth metals, and previous guarantees of quick rare earth licenses for American companies never materialized. Earlier this month, Beijing further tightened controls, massively expanding restrictions.
In Thursday’s deal, China agreed to review these newly imposed rules, although initial restrictions unveiled in April appear to remain in place.
The dispute over rare earths predates the current administration; China has been controlling minerals almost completely for years as part of its broader industrial policy.
Here’s what you need to know about rare earths.
What are rare earths? And are they actually “rare”?
Rare earths include 17 metallic elements from the periodic table, consisting of scandium, yttrium and lanthanides.
The name “rare earths” is a bit of a misnomer, since the materials are found throughout the Earth’s crust. They are more abundant than gold, but their extraction and processing are difficult and expensive, as well as being harmful to the environment.
What are rare earths used for?
Rare earths are ubiquitous in everyday technologies, from smartphones to wind turbines, LED lights and flat-screen televisions. They are crucial for electric vehicle batteries, as well as MRI scanners and cancer treatments.
Rare earths are also essential to the US Military. They are used in F-35 fighter jets, submarines, lasers, satellites, Tomahawk missiles and more, according to a 2025 CSIS investigative note.
Where do rare earths come from?
Sixty-one percent of mining rare earth production comes from China, according to the International Energy Agency, and the country controls 92% of global production in the processing phase.
There are two types of rare earths, classified according to their atomic weight: heavy and light. Heavy rare earths are scarcer, and the United States does not have the capacity to separate rare earths after extraction.
“Until the beginning of the year, the heavy rare earths that we extracted in California were sent to China to be separated”, notes Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, to CNN.
However, the Trump administration’s announcement of very high tariffs on China in April derailed this process. “China has demonstrated a willingness to weaponize” the United States’ dependence on China for the separation of rare earths, says the expert.
The US has a working rare earths mine in California, according to Baskaran.
Why are rare earths important in the trade war?
Beijing is using rare earths as a major lever in the trade war and its latest restrictions were one of the main topics of conversation when Xi and Trump met on Thursday at the APEC summit in South Korea.
Earlier this month, China added five rare earth elements – holmium, erbium, thulium, europium, ytterbium and magnets and related materials – to its existing control list, requiring export licenses. The total number of rare earths subject to restrictions thus amounts to 12. China has also required licenses to export rare earth manufacturing technologies outside the country.
It’s not the first time this year that Chinese restrictions on rare earths have angered Trump. In June, Trump claimed on Truth Social that China violated a trade truce as Beijing maintained control over exports of seven rare earth minerals and associated products.
Export controls could have a major impact as the US relies heavily on China for rare earths. Between 2020 and 2023, 70% of U.S. imports of rare earth compounds and metals came from the country, according to a report from the U.S. Geological Survey.
But China’s latest restrictions were seen as a dramatic escalation in Trump’s trade war between the world’s two biggest economic powers.
CNN’s Nectar Gan, John Liu, Donald Judd, Kylie Atwood, Phil Mattingly and David Goldman contributed to this report
