TRUMP: "U.S. Wants Nothing from China." Meanwhile, in London... Rare Earth Diplomacy

Published by Wolf Street Economics

Serious Economics. No Hype. Just Signals

A Soundbite and a Signal

Donald Trump's recent declaration, in the context of his dramatic tariffs, "The United States wants nothing from China," made for a great headline. It was the kind of line tailored for the MAGA audience, a social media loop, or a populist narrative that paints U.S. self-reliance as already complete. But, behind that soundbite, something else was unfolding.

At the same time, in the hushed corridors of a London hotel, senior American and Chinese officials were meeting to discuss an urgent matter: rare earth minerals. These talks weren't about broad tariffs or currency manipulation. They were about the industrial minerals at the heart of the 21st-century economy, and the deep dependency that still binds the United States to China.

This isn't a story of decoupling. It's a story of entanglement, contradiction, and geopolitical theatre layered over logistical dependence.

The Rare Earth Reality

Rare Earth Elements (REE), including neodymium, dysprosium, and praseodymium, are essential inputs in a vast array of technologies: electric vehicle motors, advanced wind turbines, smartphones, missile guidance systems, radar arrays, and jet engines. Although they're not "rare" geologically, their processing and refining are highly specialised and geographically concentrated.

Today, China controls not only most of the global mining, but also the lion's share of the refining capacity. The United States has more domestic resources, particularly through MP Materials at the Mountain Pass mine in California, but the ability to refine those materials at scale remains limited. For the time being, Chinese processing is the bottleneck; and that bottleneck gives Beijing strategic leverage.

That leverage was on full display in May 2025, when China slashed rare earth magnet exports by a staggering 74% year-on-year. Exports to the U.S. specifically plunged 93%. The move sent ripples through American industrial supply chains, particularly in the defence and electric vehicle sectors, where such magnets are irreplaceable.

The London Talks: Kicking the Can, Not Solving the Problem

In response, high-level representatives from Washington and Beijing convened in London from June 9-10. The result was what officials called a "framework agreement": essentially, a short-term mechanism to prevent further deterioration.

According to reports, China agreed to resume issuing certain export licences for rare earth materials, and associated magnet products. In return, the U.S. offered limited concessions around export controls, though critical restrictions on military-grade applications and advanced semiconductor tech remain in place.

But, the real story is what didn't happen. The agreement did not touch on the most strategically sensitive materials, such as samarium-cobalt magnets used in F-35 fighter jets and naval propulsion systems.

So, what we got wasn't a resolution. It was a pause.

Trump's Statement: Posturing vs. Practicality

Trump's remark that the U.S. "wants nothing from China" was characteristically dramatic. It aligns with his political brand: America-first, anti-globalist, and sharply confrontational with China. And, rhetorically, it makes sense early in his presidency, as kind of a fulfilment of his campaign promises.

But, materially? The U.S. does want something from China, and quite urgently. The London negotiations confirm that. While Washington tries to build new refining infrastructure and secure alternative supplies from allies like Australia and Canada, the present-day reality is one of dependence. (And relying on allies may also be painful and unpalatable since Donald Trump is trying to portray an American image that relies on no one.) The U.S. needs Chinese refined rare earths to keep its tech economy, and defence-industrial complex, moving.

The contradiction is stark: we're being told the U.S. is "done with China," even as diplomats quietly negotiate access to the very materials that make modern military and economic power possible.

The EU Joins the Fray

Europe isn't standing still, either. The European Union has made access to Chinese rare earths a top priority in its own diplomatic engagements with Beijing. In a parallel track to the U.S.-China talks, EU leaders are pushing for long-term licensing guarantees, hoping to prevent supply chain shocks of the kind seen in recent months.

This signals a broader pattern: major economies across the West are not just competing with China; they're competing with one another to secure their rare earth supply chains. And, while domestic production and recycling efforts are ramping up, none of these initiatives can fully replace China's capacity, at least not yet.

What Comes Next?

The fundamental asymmetry remains. The United States and its allies are trying to buy time, time to develop refining capabilities, build new trade corridors, and reshape the mineral supply web. But, China still controls the spigot.

The London deal, such as it is, bought some breathing room. But, it didn't resolve the underlying tension. It didn't reverse the dependency. And, it certainly didn't bring the U.S. closer to the vision of independence evoked by Trump's headline-grabbing line.

This is not a clean decoupling. It's a muddled and partial recalibration, one where the signals are often buried beneath the noise.

Final Thought: Don't Listen to the Soundbite. Watch the Supply Chain.

What we're witnessing isn't ideological. It's logistical. Rare earths aren't just a technical input; they're a strategic vulnerability. And, no matter what the politicians say, the spreadsheets tell a different story.

Washington can posture. But, if it wants to build jets, batteries, and turbines, and do it without Chinese inputs, it has a long road ahead.

Until then, the real U.S.-China relationship is still being negotiated in quiet rooms, not public platforms.

Wolf Street Economics

Serious Economics. No Hype. Just Signals.

Next week: "The New Scramble for Africa: Rare Earths, Green Tech, and a Geoeconomic Chessboard."