Rare earths: Importance in Trump's trade war explained

Rare earths: Importance in Trump's trade war explained

The trade war between the USA and China has one crucial point of contention: rare earths. Last month, President Donald Trump declared that the United States needs Greenland "very urgently," renewing his threat to annex the Danish territory. Greenland is a resource-rich island with a reserve of critical minerals hidden in the ice, including rare earths. In addition, Trump signed a “rare earth agreement” with Ukraine.

What are rare earths and are they really “rare”?

Rare earths are 17 metallic elements in the periodic table, including scandium, yttrium and the lanthanides. The term “rare earths” is misleading because these materials are found throughout the Earth’s crust. They are more abundant than gold, but are difficult and expensive to extract and process. Furthermore, they are harmful to the environment.

What are rare earths used for?

Rare earths are ubiquitous in the technologies we rely on in everyday life - from smartphones to wind turbines to LED lights and flat-screen TVs. They are also crucial for batteries in electric vehicles as well as MRI scanners and cancer treatments.

Rare earths also play an essential role in the US military. They are used in F-35 jets, submarines, lasers, satellites, Tomahawk missiles and other military applications, according to a 2025 research note from CSIS.

Where do rare earths come from?

According to the International Energy Agency, 61% of rare earths mined come from and the country controls 92% of global production in the processing phase.

There are two types of rare earths, categorized by their atomic weight: heavy and light. Heavy rare earths are rarer, and the U.S. doesn't have the capacity to perform the difficult separation after extraction.

“Until the beginning of the year, we were sending all the heavy rare earths that we mined in California to China for separation,” Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, told CNN. However, the Trump administration's announcement in April that it would impose steep tariffs on China derailed that process. "China has shown that it is willing to take advantage of America's dependence on China in rare earth separation," she added.

There is currently only one functioning rare earth mine in California, Baskaran said.

Why are rare earths important in the trade war?

On Friday, Trump stated on Truth Social that China violated a trade agreement which was agreed last month. Beijing has maintained its export controls on seven rare earths and related products in response to Trump's "reciprocal tariffs" on Chinese goods announced in April. After the ceasefire agreement in Geneva, US officials had expected China to ease export restrictions on these raw materials.

The export controls could have a significant impact because the US is heavily dependent on China for rare earths. Between 2020 and 2023, 70% of US rare earth imports came from the country, according to a US Geological Survey report shows.

Beyond China, rare earths are also part of U.S. foreign policy goals regarding Ukraine, Greenland and Saudi Arabia. “Ukraine has a very young mining industry, and even though the topic was part of the discussions, we actually have no maps on what is economically viable,” Baskaran said.

For further insight into rare earths and the geopolitical implications, comprehensive reports are available.