Trade war rebooted: China's rare-earth controls put U.S.-China relations back on edge
For a moment it looked like the relationship between China and the US was showing signs of improvement.
news.sky.comHere are the latest developments on the US competition with China over rare earths as of May 2026.
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US and allies push to diversify supply chains: The United States has been advancing initiatives with partners to reduce dependence on China for rare earths and key magnets, including new mining, processing, and recycling projects across North America and partners in Europe and the Asia-Pacific. This coalesces around formalized supply-chain resilience efforts and potential trade arrangements to ensure access to critical minerals.[3][5]
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China maintains a dominant position, but pressure is mounting: China continues to lead global production and refining capacity for rare earths, and policymakers view this leverage as a strategic tool in broader economic and security negotiations. Reports through early 2026 indicate ongoing bargaining dynamics with Western countries over access, pricing, and export controls.[1][5]
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Policy actions and economic signals in 2025–2026: The US administration has exercised measures to bolster domestic capacity, including government investment in mining and processing, potential pricing mechanisms to stabilize markets, and international pacts aimed at pooling member countries’ resources to counter China’s dominance. Analysts note these efforts require years to realize substantial diversification and price stabilization.[5][7]
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Market outlook and challenges: Even with intensified efforts, industry observers caution that the transition away from China’s dominance will be slow due to large sunk costs, long permitting timelines, and the complex economics of refining and magnet production. The general consensus is a multi-year build-out, with incremental gains in domestic and allied supply chains rather than a sudden decoupling.[7][5]
If you’d like, I can pull the most recent headlines from major outlets (BBC, CNBC, Reuters) and summarize them in a quick bullets list with links. I can also create a brief chart showing the timeline of key policy milestones from 2024–2026.