China's Rare Earth Grip Holds Despite Trump-Xi Talks

Key Points:

• Donald Trump described his May 14-15 summit with Xi Jinping as a "success," but no formal agreement was reached on China's export controls of rare earth elements, leaving shipments below historical levels.
• China controls about 60% of the world's rare earth output and nearly all processing capacity, having imposed export restrictions since April 2025, which have sharply reduced exports and caused prices to surge, especially for critical elements like yttrium.
• The U.S. government has made significant investments to develop domestic rare earth mining and processing, including Pentagon stakes and funding for companies like MP Materials and USA Rare Earth, but new supply capacity will take years to materialize.
• The suspension of broader Chinese export controls, agreed upon in October 2025, expires in November 2026, creating uncertainty about future rare earth supply flows and underscoring the strategic importance of stable access for U.S. aerospace, semiconductor, and electric vehicle industries.
• While the summit yielded positive rhetoric and a soybean purchase deal, it failed to deliver concrete commitments or timelines to resolve rare earth supply concerns, leaving the U.S.-China rare earth market dynamics largely unchanged.