China has what Trump needs for AI race: Why Beijing’s rare earths may matter more than tariffs at Trump-Xi summit
A summit between the US and Chinese heads of state is set for late September 2026 in Washington, with rare earth supply, artificial intelligence, and trade tensions high on the agenda
China is estimated to control around 70% of global rare earth mining and roughly 90% of global processing capacity, giving it leverage in the talks
China's rare earth export controls carry a deadline in November 2026, adding urgency for the US to secure alternative supply arrangements before then
The discussions are expected to build on a one-year trade truce reached in Busan in late 2025, under which China paused some export restrictions and purchased US soybeans, while the US eased certain tariffs
Greenland has been referenced in the context of US efforts to diversify critical mineral supply chains away from Chinese dependence
Rare Earth Elements — What They Are and Why They Matter
Rare earth elements (REEs) are a group of 17 chemically similar elements — the 15 lanthanides plus scandium and yttrium — that are essential inputs for high-performance magnets, electronics, and clean-energy and defence technologies, despite not being geologically "rare" in the strict sense.
Key Details
- Applications include permanent magnets for electric vehicle motors and wind turbines, phosphors, catalytic converters, semiconductors, and precision-guided defence systems
- REEs are typically extracted from minerals such as monazite and bastnaesite; separating and refining them into usable oxides/metals is technically difficult and environmentally intensive, which is why mining and processing capacity are concentrated differently
- China's dominance stems less from raw reserves and more from its near-monopoly on midstream processing and refining capacity, built up over decades
The Trump-Xi summit's focus on rare earths reflects this processing chokepoint — even countries with their own raw reserves remain dependent on China to convert ore into usable rare earth materials, which is the leverage point being negotiated.
India's Critical Mineral Strategy
India holds substantial rare earth reserves but limited processing capacity, and has recently moved to build a domestic value chain through dedicated missions and infrastructure announcements.
Key Details
- India's monazite reserves are estimated at over 13 million tonnes, containing several million tonnes of rare earth oxides, concentrated in coastal sands of Odisha, Kerala, Andhra Pradesh, Tamil Nadu, and other states
- The National Critical Mineral Mission (NCMM), launched in January 2025, is the central pillar of India's strategy — covering exploration, processing incentives, recycling, and overseas acquisition
- Khanij Bidesh India Limited (KABIL) — a joint venture of NALCO, Hindustan Copper, and MECL under the Ministry of Mines — is mandated to acquire and develop critical mineral assets overseas
- India's Union Budget for FY 2026-27 announced "rare earth corridors" in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu for mining, processing, and magnet manufacturing
India's push to build domestic rare earth processing capacity is a direct response to the same Chinese processing dominance now shaping US strategy at the Trump-Xi summit — both are trying to reduce dependence on a single-country chokepoint.
Quad Critical Minerals Initiative Framework
Beyond bilateral US-China negotiations, critical mineral security has become a formal multilateral initiative among the Quad grouping, of which India is a member.
Key Details
- The Quad Critical Minerals Initiative Framework — comprising Australia, India, Japan, and the United States — was announced on 26 May 2026 at the Quad Foreign Ministers' Meeting in New Delhi
- The initiative aims to mobilise up to $20 billion through loans, guarantees, subsidies, and long-term purchase agreements to diversify mining, processing, and recycling of critical minerals and rare earths away from China
- This builds on the Quad's broader mandate as a strategic dialogue (with Australia, India, Japan, and the US) that also covers maritime security, technology, and supply chain resilience
The Quad initiative represents the plurilateral track of the same rare earth diversification effort that the bilateral Trump-Xi summit is separately addressing, illustrating how India is positioned in the broader US-led response to Chinese mineral leverage.
Strategic Minerals as Geopolitical Leverage
The use of rare earth export controls as a negotiating tool parallels historical precedents of resource-based geopolitical leverage, and intersects directly with the US-China contest over artificial intelligence hardware.
Key Details
- Rare earth magnets and specialised materials are essential inputs for semiconductor manufacturing equipment and AI hardware supply chains, linking mineral leverage directly to the technology/AI competition between the two countries
- The 2025 Busan truce format — where China paused certain export curbs in exchange for US tariff relief and agricultural purchases — is a recent template for how such disputes have been provisionally managed
- Greenland's mention reflects broader US interest in Arctic critical mineral and rare earth deposits as a potential alternative source, tied to wider US strategic interest in the Arctic region
The Trump-Xi summit sits at the intersection of trade policy, critical mineral supply chains, and the technology/AI race, with rare earths functioning as the leverage point connecting all three.
- China's estimated share of global rare earth mining: about 70%
- China's estimated share of global rare earth processing capacity: about 90%
- Deadline associated with China's rare earth export controls: November 2026
- Prior trade truce reached at Busan: October 2025 (one-year duration)
- Quad Critical Minerals Initiative Framework announced: 26 May 2026, New Delhi; mobilisation target of up to $20 billion
- India's monazite reserves: over 13 million tonnes, containing several million tonnes of rare earth oxides
- National Critical Mineral Mission launched: January 2025