February 21, 1972. Beijing Capital Airport.

Richard Nixon stepped off Air Force One into eighteen-degree air and extended his hand to Zhou Enlai. Twenty-five years of hostility ended with that handshake. The world watched. Nixon called the trip "the week that changed the world." He was right — just not in all the ways he expected.

That opening created a trade relationship that grew, over fifty years, into one of the deepest economic entanglements in history. And buried inside it — almost invisible until it wasn't — was a dependency on Chinese rare earth refining that no one in Washington had thought much about. China produces 90% of the world's processed rare earths. It built that lead by spending three decades making it cheaper for everyone else to buy from China than to build their own capacity. For a long time, that worked for both sides.

Then China cut the tap. And this week, after a summit in Geneva meant to turn the tap back on, the West found out how little has actually changed.

President Trump and President Xi met May 14 and 15. Rare earths were on the agenda. Yttrium, scandium, and neodymium were named specifically. The White House summary said China had agreed to "address U.S. concerns about shortages." Sounds like progress. Read it again more carefully.

"Address." Not remove. Not lift. Not eliminate. Just address. That one word is doing a lot of work.

It matters because this is the second time in six months that China has made a big diplomatic commitment and not followed it with regulatory action. In October 2025, at the Busan summit, Washington said China had committed to "effectively eliminate" all current and proposed rare earth export controls. That did not happen. The controls stayed. Some got tighter. Now the language in the post-summit communiqué is softer. China's Ministry of Commerce made the position explicit on May 20 — calling its export restrictions "lawful and legitimate" and saying Beijing would cooperate only on "reasonable" concerns. They did not define reasonable.

Here is what remains unchanged. The licensing requirements on seven heavy rare earth elements, put in place in April 2025, are still fully active. Licenses for defense and semiconductor users are still being delayed or denied. Analysts at Benchmark Mineral Intelligence said this week that export controls now appear to be a permanent feature of global trade rather than a negotiating tool China intends to remove. China's 15th Five-Year Plan — which runs through 2030 — explicitly calls for strengthening export control systems and deepening the country's dominance in this sector. This is not a temporary posture. It is becoming the shape of the market.

The West is spending real money to change that. More than $6 billion in rare earth investments outside China were announced last year. Another $2.8 billion followed in the first quarter of this year. That is serious. But serious money and serious timelines are different things. McKinsey estimates that for dysprosium and terbium — the two heaviest, most critical rare earths — non-Chinese producers will still cover less than one-fifth of global demand by 2035. Nine years from now.

Nixon's handshake in 1972 created a dependency that took half a century to develop. A summit communiqué in 2026 will not undo it. The question is whether the West is building fast enough to matter before the dependency bites again.

Scientists at the Chinese Academy of Sciences have identified a new type of rare earth formation in Heilongjiang and Jilin provinces — China's frigid northeast. Unlike the clay-heavy deposits of southern China that require chemical leaching, these northern formations are loose sand and gravel shaped by freeze-thaw cycles, making extraction cheaper and cleaner. More striking: these sites contain both light and heavy rare earths together — upending China's long-standing geological rule that heavy elements stay in the south. The discovery, published in Acta Petrologica Sinica, could expand China's proven reserves significantly.

The Pentagon is weighing whether to pull an $80 million conditional loan offer to ReElement Technologies Corp., a rare earth recycler — touching off a fight with the White House over a deal meant to build domestic processing capacity. Officials vetting the company have raised doubts about its ability to scale its technology and meet its revenue forecasts. The Office of Strategic Capital originally announced the agreement in November. The White House defended ReElement, calling it one of many emerging companies working with the government. The dispute shows how hard it is to move fast enough — and pick the right partners — when time is the point.

Almost every Western rare earth refiner depends on a chemical called oxalic acid to convert rare earth swarf into the oxide powders used in magnet production. China makes most of the world's oxalic acid. Nobody talks about it, but it is one of the quieter ways the West's "independent" rare earth supply chains still run through Beijing. That changed this week. Nth Cycle, a Massachusetts refining technology company, announced a joint development agreement with Ionic Rare Earths (ASX: IXR) to replace the oxalic acid step entirely using Nth Cycle's electro-extraction process. The system generates its own reagents using electricity instead. Integration at Ionic's Belfast facility is planned for late 2026. Oxalic acid accounts for roughly 50% of IonicRE's carbon footprint, which is already 60% lower than primary mined supply. Cutting it would compress that further — and close a supply chain loop that most people did not know was open.

Michel Van Hoey, Senior Partner, McKinsey & Company
May 2026

YTTRIUM

Yttrium does not make the front page often. But this week, in the White House summary of the Trump-Xi summit, it got named alongside neodymium and scandium as one of the critical rare earths where China had agreed to "address" American concerns. That tells you something. Yttrium is not a magnet metal — it goes into LED phosphors, cancer treatment drugs, camera lenses, and the ceramic coatings on jet engine turbine blades. The most heat-resistant alloys in aerospace use it. It also appears in yttrium-aluminum-garnet lasers, the standard laser in medical and industrial cutting. The United States has no domestic yttrium production at scale. China controls the supply. And now it is on the list of elements where the word "address" has to do the work of a solution.

China's Rare Earth Industry Association reported its price index at 252.6 on May 21 — down from early-2026 spikes above 300, but still far above the 150–180 range that held through most of 2024 and 2025. Key magnet materials show sustained pricing: NdPr oxide at $102–105/kg and terbium oxide at $886–895/kg in the domestic Chinese market. Outside China, prices remain substantially higher. The index signals that the market has not normalized — it has just settled into a structurally elevated range.

— Rare Earth Exchanges, May 21, 2026

Reuters reported that China's rare earth magnet exports rose 8.2% year on year in the first two months of 2026. Shipments to the United States fell 22.5% over the same period. The aggregate number looks like relief. The bilateral number tells a different story. Selective access is not broad normalization, and the gap between those two figures is where U.S. manufacturers are still getting squeezed.

— Reuters / Strategic Metals Invest

USA Rare Earth has commissioned Phase 1a of its sintered neodymium-iron-boron magnet production line in Stillwater, Oklahoma, and can now begin fulfilling customer orders in the second quarter of this year. The company received a $1.6 billion equity-and-debt investment from the Trump administration in January, giving the government a 10% stake. The Stillwater facility is one of only a handful of rare earth magnet manufacturing operations on American soil.

— Market News Updates / Reuters

REAlloys (Nasdaq: ALOY) is developing an integrated rare earth metallization and alloying platform in Saskatoon, Saskatchewan, targeting production of 525 tonnes per year of NdPr metal and 30 tonnes of dysprosium oxide by early 2027. CSIS has identified rare earth metallization — the step that turns oxides into alloys and magnets — as the hardest capability to rebuild outside China. REAlloys holds an 80% offtake on the Saskatchewan Research Council's processing facility, with feedstock agreements across four countries.

— OilPrice.com / CSIS