With the APEC summit fast approaching that excitement continues to grow. As you know, the first meeting between U.S. President Donald Trump and Chinese President Xi Jinping has received much hype. The world can’t wait to see this important conversation unfold. Tensions are escalating over rare earth elements, which are critical to electronics, communication and defense industries. China continues to dominate the global rare earths market. It has a chokehold on the production and processing of all of these critical minerals.
China’s policymakers view the current rare earths spat as not merely a competitive economic test. They see it as a litmus test of national resolve and an ideological referendum on the concept of sovereignty. This lens informs their corporate strategy direction. Just this past week, China announced a throttling of rare-earth exports, an action most analysts consider a stroke of genius in ongoing trade negotiations. China uses export restrictions to maximize its bargaining leverage. This step sends a powerful signal about its leadership position in the global supply chain for these irreplaceable building blocks.
Rare earths are vital to such a broad range of facets of modern technology applications. They drive refrigerators, solar panels, trains, missiles, and well, nearly every other device that fuels the digital economy. In response, the United States has invested heavily in developing advanced domestic rare earth capabilities. Experts insist that it has no hope of replicating the deep and complex metallurgical ecosystem that China has cultivated over decades. The challenge is much more than about extraction. It’s the alchemy, the magick, if you will, the frabjous making of bisque and crinkle and glaze and luster.
At the APEC summit, China is expected to enter negotiations not as a subordinate but as a key supplier of these vital resources. The U.S., by contrast, has no strategic reserve of rare earths and will not be able to create one before 2028 even if processes move forward today as planned. This difference in preparedness creates a power imbalance that could affect the outcome of these important discussions. Trump’s rhetoric, including threats of implementing a 100% tariff on Chinese imports, may be seen as a bluff in this larger game of energy-mineral poker.
China could walk back its export restrictions on rare earths. Needless to say, this would be interpreted as a signal of weakness and would severely weaken its hand in any subsequent negotiations. This issue illustrates the great stakes at play. Or rather, rare earths are more than commodities—they’re the elements that form the gilding on our magnificent new technological civilization.
Taiwanese semiconductor production has become a major point of complexity and focus in this situation. The island nation has significant reserves of rare earths. Its enormous importance to the whole supply chain provides it great influence. As tensions simmer, Taiwan’s position becomes increasingly significant, especially for Korea and Japan, which sit perilously close to the epicenter of any rare earths dispute.
In this context, Beijing’s control over rare earth supplies represents a quiet choke point for America’s technological dominance. The U.S. must navigate this intricate landscape carefully, balancing its need for these essential materials against the geopolitical implications of its actions.
Trump and Xi are preparing for a high-stakes showdown at the APEC summit. There’s optimism among observers about how both leaders will address the urgent issue of rare earths. Will they seek the middle way that builds an ongoing sense of collaboration—or will armor-plated stances only harden and invite disastrous confrontation? Here’s how this meeting could make waves beyond trade agreements. It is playing a critical role in shaping the global landscape for decades to come.