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Trump and Xi discuss China’s grip on raw materials

The American and Chinese leaders seek stability while Washington remains dependent on Chinese processing of rare earth metals.

Donald Trump will receive Chinese President Xi Jinping in Washington from Wednesday for a state visit lasting until Friday. The talks come as both countries compete economically and technologically, while China holds a dominant position in processing raw materials for electric cars, electronics and defence systems, among other things.

According to the White House, Xi will arrive on Wednesday 23 September and be formally received at the White House on Thursday. China’s Ministry of Foreign Affairs confirms that the state visit will last from 23 to 25 September inclusive. The precise negotiating agenda and any agreements on critical minerals had not been made public early on Wednesday.

The dispute over raw materials mainly concerns rare earth metals: a group of elements needed for permanent magnets in electric vehicles, wind turbines, electronics and military applications, among other things. The International Energy Agency calculated that China accounted for approximately 60 per cent of global mine production of magnetic rare earth metals in 2024. Its share was 91 per cent in refining and 94 per cent in permanent magnets.

This gives Beijing influence over a much larger part of the production chain than mining alone. Ore must first be concentrated, separated and refined before metals, alloys and magnets can be made from it. These intermediate steps are precisely what is available only to a limited extent outside China. The IEA therefore warns that new mines in other countries will not quickly reduce dependence if refineries and magnet factories lag behind.

China has introduced export controls on various raw materials and products in recent years. According to the IEA, seven heavy rare earth metals were initially subjected to restrictions in 2025; the scope was later expanded. Some of the expanded measures have been suspended until November 2026, but the underlying vulnerability remains. Export licences could therefore become part of broader economic and geopolitical negotiations.

The meeting is about more than minerals, however. According to the Associated Press, trade, artificial intelligence and security issues are also involved. The two countries have previously tried to honour trade agreements, but according to AP this has met with varying degrees of success. Analysts therefore expect limited practical steps and keeping communication open rather than a comprehensive agreement.

That presents a difficult balance for Washington. The United States wants to become less dependent on China and is therefore investing in domestic production and alternative suppliers. Such projects take years and are more expensive when developed outside existing Chinese economies of scale. The IEA estimates that outside China, by 2035, roughly twice as much mining capacity, four times as much refining capacity and six times as much magnet capacity will be needed on top of projects already announced to meet expected demand.

The outcome of the talks can therefore mainly be measured by whether the two countries bring more predictable trade rules and new supply channels closer. Until official agreements are published, it remains unclear whether Washington will secure concessions on export licences and whether Beijing will demand something in return. What is clear is that the raw-materials chain has become a source of leverage in the relationship between the world’s two largest economies.

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