What if the future of the global economy depended on a few tiny metals hidden deep in the earth? Why are the fates of cars, smartphones, and even defense decided not in Silicon Valley labs but in negotiations in London? The trade war between the US and China has turned rare earth elements into weapons of the 21st century—and the world is witnessing a new great game for control of the technological future.

London talks: when metals are more important than gold

Key talks between the US and China on the export of rare earth elements and strategic minerals took place in London on June 10, 2025. After months of tension, during which Beijing effectively blocked the supply of seven critical metals and powerful magnets, the parties agreed to a “trade truce” and created a new framework for controlling exports Reuters, The New York Times.

What are rare earth elements and why are they critical?

Rare earth metals are a group of 17 elements used in batteries, smartphones, electric cars, wind turbines, military radars and even missiles. Although they are not that rare, their extraction and purification is an extremely complex and toxic process. China has concentrated more than 70% of the world's production and more than 85% of the processing of these metals in its hands over the past three decades. The New York Times, Business Standard.

How did China get a monopoly?

Back in the 1990s, Beijing recognized rare earth elements as a strategic resource, closed the market to foreign companies, invested in mining and processing, and actively subsidized exports. While the West closed its own mines due to environmental risks, China increased its capacity, bringing its share of global production to 97% in the early 2000s. Business Standard.

In 2025, after another wave of tariffs from the US, China responded with tough export restrictions on elements such as terbium, yttrium, dysprosium, gadolinium, lutetium, samarium and scandium. These metals are critical to the defense, automotive, aviation and energy industries. The New York Times, Business Standard.

Truce or trap: what does the new agreement entail?

Following the London negotiations, the parties agreed on a gradual resumption of exports of rare earth metals and magnets, as well as a reduction in tariffs to the level of early 2025. The key condition is to fulfill the obligations by August 10, otherwise the trade wars will flare up with renewed vigor. Reuters, The New York Times, Fortune.

Global risk chain: who is most dependent on China?

The largest consumers of Chinese rare earths remain Japan, South Korea, the United States and the EU. For example, 93% of the yttrium used in the United States for lasers and superconductors is imported from China. Dysprosium — key for magnets in electric cars and turbines — goes almost entirely to Japan and South Korea. Business Standard.

Weapons of the 21st Century: Why Rare Earths Are More Than Just Raw Materials

Rare earth elements have become a strategic weapon in the new Cold War. They are essential for the production of electric cars, smartphones, military drones, air defense systems, missiles, and even medical equipment. Any disruption in supply is not only an economic blow, but also a risk to national security. AInvest.

Impact on global markets and inflation

After the April embargo, prices for rare earth metals soared by 40–60%. Automakers in Germany, the US and India have warned of the risk of production shutdowns. Consumers have already felt the increase in spending on defense contracts and electronics in the form of higher prices The New York Times, Fortune.

Is it possible to reduce dependence on China?

Western countries, Japan and Australia have been investing in their own rare earth mining and processing for several years, but it is impossible to quickly replace the Chinese monopoly. Production is too toxic and expensive, and purification technologies are complex and patented by Beijing. Business Standard, The New York Times.

Politics, ecology and the future of the market

The US, EU and Australia are launching government support programs for new mines, processing plants and research in the field of “green” technologies. However, environmental standards and public protests are slowing the launch of new projects Fortune.

Rare earth elements as a tool of geopolitics and technological blackmail

Recent events confirm that rare earth elements are not only raw materials for smartphones or batteries, but also a key weapon in the global geopolitical chessboard. As noted NewsSky, samarium — one of the rare earth elements that China holds in monopoly, has already become a lever of influence on the global economy and technological progress. It is control over such resources that allows Beijing to dictate terms not only in the sphere of trade, but also in the development of artificial intelligence, defense and energy.

Will the London Truce become the new norm?

Experts warn that even if a truce is implemented, the world will remain vulnerable to “resource blackmail.” Each new trade or political crisis could trigger a new wave of restrictions and price spikes. AInvest, Fortune.

Conclusion: The technological future is under the control of rare earths

The trade war between the US and China has proven that control over rare earths is not just a matter of economics, but also of security, technological leadership, and global influence. The London Truce is just a temporary pause in the great battle for the resources of the future.

Sources

The Washington Post, Reuters, The New York Times, Business Standard, Fortune, The New York Times (2), AInvest, NewsSky