US President Donald Trump is preparing to meet Chinese President Xi Jinping this week. However, one major part of Trump's trade strategy remains unfinished: reducing America's dependence on China for critical minerals.
The US wants to build its own supply of critical minerals so that American companies do not have to depend heavily on China for these materials, according to Reuters. Several US mining projects are still years away from starting production, even after the Trump administration invested billions of dollars in the sector.
These minerals are important for making semiconductors, robots, military weapons and equipment, and products used in the artificial intelligence (AI) industry.
This dependence makes it difficult for Trump to take a tough position against China during trade talks. If he puts too much pressure on Beijing through tariffs or export restrictions, China could limit America's access to important minerals, magnets and chemical materials that the US does not produce in sufficient quantities, according to six analysts interviewed by Reuters.
China uses rare earth minerals as trade pressure
China is the world's largest producer of rare earth minerals. These materials are used in several important industries, including technology, electric vehicles and defence. Last year, China restricted exports of rare earth minerals and magnets. This disrupted production at Ford Motor and other American manufacturing companies, according to Reuters.
{{/usCountry}}China is the world's largest producer of rare earth minerals. These materials are used in several important industries, including technology, electric vehicles and defence. Last year, China restricted exports of rare earth minerals and magnets. This disrupted production at Ford Motor and other American manufacturing companies, according to Reuters.
{{/usCountry}}The US had to negotiate with China to ensure that American companies continued receiving these important materials.
Rich Nolan, head of the National Mining Association, said China has been using its control over critical minerals to put pressure on the US whenever it wants, according to Reuters.
US mining projects are moving slowly
The US is struggling to increase its own production of critical minerals because it has spent many years without building a strong mining and processing industry.
Samir Kapadia, head of trade at Washington-based business advisory firm Vogel Group, said there are currently more presentations and plans for mining projects than actual permits. He questioned how many projects are ready to begin construction and how many exist only on paper.
Jack Lifton, an analyst at Technology Metals Research, said the US is in a very weak position because China has built a strong hold over the critical minerals industry. Building mines, refineries and processing facilities takes a long time. Some of these projects could take 10 years or even longer before they become fully operational, according to Reuters.
China has a much bigger magnet production capacity
America's dependence on China is especially clear in the production of neodymium-iron-boron magnets. These magnets are used in electric vehicles and military equipment.
The US had the capacity to produce around 4,500 metric tons of these magnets every year in 2025. China's production capacity was around 210,000 metric tons annually, much higher than America's, according to the International Energy Agency (IEA).
Major US minerals projects may take years to start production
The Trump administration has taken steps to speed up mining and mineral projects. However, several major projects are still years away from starting production.
A $7.4 billion refinery in Tennessee, backed by South Korea's Korea Zinc, is being built to process copper, zinc and other critical minerals. However, it is not expected to open until 2030.
Mining companies Rio Tinto and BHP are planning to build what could become North America's largest copper mine. However, the project is not expected to open until the next decade.
Last year, the Trump administration agreed to take an ownership stake in Trilogy Metals. The company plans to start producing copper in Alaska from 2031.
Some US critical minerals projects are moving ahead
Not all American projects are at an early stage. Some companies have already started production or are closer to bringing their projects online. Vulcan Elements has started making rare earth magnets in North Carolina. However, its customers have not yet approved the magnets for use in their products.
MP Materials is expanding its magnet production in Texas through a multibillion-dollar partnership with the Pentagon. Nevada's Thacker Pass mine, which is North America's largest lithium source, is under construction by Lithium Americas. The company expects production to begin in 2028. Perpetua Resources plans to start producing antimony in Idaho by 2029.
Xi meeting will test Trump's trade strategy
Trump's meeting with Xi Jinping, expected on Thursday, will be an important test of America's ability to negotiate with China while still depending on it for critical minerals. The two leaders may agree to extend their existing trade truce, which is due to expire in January.
The trade agreement includes exemptions from certain export restrictions on critical minerals. Extending it could help the US continue receiving these materials from China. However, America's slow progress in building its own mining and processing industry means Trump cannot easily reduce China's influence in the short term.