A high-stakes U.S. push for rare-earth access hinges on a symbolic “handshake” in London, with global chip supply and trade tensions hanging in the balance.
At a Glance
- U.S. and China meet in London for rare-earth export agreement talks
- Washington seeks resumption of bulk shipments for tech and defense use
- In exchange, the U.S. may ease certain semiconductor export controls
- China has delayed export license approvals despite prior pledges
- Investors react positively as trade tensions show signs of thawing
Strategic Pivot
In a pivotal diplomatic moment, U.S. economic officials arrived in London to finalize a long-sought deal with China over critical rare-earth minerals. The American delegation, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, aims to secure a firm commitment—described as a “strong handshake”—to release withheld shipments essential for U.S. defense, electric vehicles, and tech production.
The effort builds on a prior agreement in Geneva and follows a personal outreach between former President Donald Trump and Chinese leader Xi Jinping. Yet implementation has stalled: Beijing has approved only a fraction of export licenses promised. The U.S. sees this as leverage in negotiations, offering a targeted rollback of chip restrictions in return.
Watch a report: China’s rare-earth “weapon”: how it shapes the tech supply chain during trade tensions.
Risk and Opportunity
Rare-earth elements remain a choke point in global supply chains, with China controlling over 80% of processing capacity. While Washington accuses Beijing of “slow-walking” compliance, Chinese officials maintain they are fulfilling obligations and frame U.S. chip curbs as discriminatory. The discrepancy reflects deep strategic mistrust between the two superpowers.
If China follows through, it could unlock semiconductor flexibility for U.S. manufacturers and signal a lasting de-escalation in economic warfare. Stocks in chipmakers such as Nvidia and AMD rose on the news, suggesting investor confidence in a near-term breakthrough.
But the risks loom large. Any perception of backsliding—or fresh geopolitical provocations, such as tensions over Taiwan—could unravel fragile progress and reignite tariffs. For now, the rare-earth handshake stands as a bellwether for whether economic pragmatism can overcome geopolitical rivalry.
