On October 23, 2025, President Trump of the United States signed a crucial mineral cooperation agreement with Australian Prime Minister Albanese at the White House on Monday (October 20), committing to invest $3 billion within the next six months to advance a project worth $85 billion. This move comes amid China’s expansion of rare earth export control, marking a new stage in Western countries’ accelerated construction of independent supply chains.
Experts analyze that China is trying to use rare earths as a strategic leverage to pressure the West, but this approach is backfiring, prompting the United States and its allies to expedite efforts to reduce reliance on China and reconstruct the global critical mineral supply system.
As China tightens its grip on rare earth exports, sparking concerns about global supply chains, Australia is rapidly emerging as a reliable supplier of critical minerals for the United States. The Chinese Ministry of Commerce announced on the 9th of this month that rare earths, permanent magnets, and related equipment and technologies would be subject to strict export controls. China’s new regulations have set strict standards, eliciting a strong reaction from the United States.
On Monday, during a meeting with Albanese at the White House, President Trump openly stated, “I don’t want China (China) to constrain us on rare earth issues.” According to the newly signed agreement, he announced, “In about a year, we will have sufficient critical minerals and rare earth resources.”
Under the agreement framework, the governments of the United States and Australia have committed to investing at least $1 billion each in mining and processing projects within the next six months, while setting minimum price guarantees for critical minerals to ensure the long-term stable operation of the projects. The initial project is valued at up to $85 billion, covering a variety of critical minerals such as neodymium, titanium, zirconium, graphite, and more.
One of the most prominent projects is the Enyba Refinery in Australia. The refinery has received $1.75 billion in government loan support and upon further development, it will produce a quarter of the world’s heavy rare earths, crucial materials for manufacturing high-performance magnets and advanced weapon systems.
Kevin Hassett, director of the White House National Economic Council, stated that Australia’s participation will help reduce global economic risks and effectively address China’s rare earth export restrictions. Australia boasts the fourth largest rare earth reserves globally and is the headquarters of the only overseas heavy rare earth producer in China, an irreplaceable position.
Facing China’s escalation of rare earth control, several experts told Dajiyuan that this strategy not only yields questionable results but may accelerate China’s loss of strategic advantage.
Yao Yuan, a professor of international studies at the University of St. Thomas in the United States, pointed out, “Although China holds an advantage in rare earth supply, when it frequently uses this to pressure the United States, naturally, the US will develop other resources and seek international cooperation.” He believes that the US-Australia cooperation signifies the US’ determination to jointly mine rare earths with other countries and no longer be beholden to China.
Sun Guoxiang, a professor at the Department of International Affairs and Business at Taiwan’s Nanhua University, analyzed from a geopolitical strategic perspective, that China’s move may appear “assertive” in the short term, but it could lead to self-defeating consequences as the West actively seeks alternative supply chains, with increasing determination. He warned that excessively using rare earths as bargaining chips could trigger comprehensive international countermeasures, accelerating China’s long-term decline in influence.
Taiwanese macroeconomist Wu Jialong believes that when Trump pushed for high tariffs on China, he foresaw China’s potential retaliatory measures and was prepared for the rare earth card. He pointed out that negotiations between the US and Australia had already begun, and China’s restrictive measures had become a legitimate reason for cooperation. He predicted that as the US and Australia resume rare earth mining and refinement, global supply will significantly increase, and China will lose its strategic leverage and economic interests.
In fact, before China announced rare earth controls, the Trump administration had been actively laying the groundwork globally, seeking to establish diversified sources of critical minerals.
In April of this year, the US reached a mineral agreement with Ukraine, prioritizing US access to rare earths and energy resources; in September, the US signed a Memorandum of Understanding worth $500 million with Pakistan, pledging to build a multi-metal refinery and develop rare earth deposits; Trump also mediated the conflict between Rwanda and the Democratic Republic of Congo, the latter holding the world’s largest cobalt reserves crucial for electric vehicle battery production.
Among these efforts, the technological breakthroughs of Australia’s largest rare earth company, Lynas, are particularly critical. In May of this year, the company produced dysprosium oxide in Malaysia, signifying the first commercial separation production of heavy rare earths outside of China, breaking China’s decades-long monopoly in the field.
A more significant breakthrough occurred on the 8th of this month when Lynas announced a strategic partnership with the US-based rare earth magnet manufacturer, Noveon Magnetics, to directly supply high-performance magnets to US defense companies. This news drove its stock price to a 14-year high, indicating the market’s strong confidence in “decoupling” from the Chinese supply chain.
China’s escalation of rare earth controls has not only stirred the United States but has also sparked collective alertness and coordinated responses from the entire Western camp.
Valdis Dombrovskis, the Vice President of the European Commission for Economic Affairs, recently revealed to the German “Handelsblatt” that as diplomatic solutions with Beijing on rare earths and other key raw material export controls have not been reached, the European Commission is considering countermeasures.
It is worth noting that the European Union’s attitude towards China has become notably tougher in recent months. Last week, the EU proposed a 50% tariff on foreign steel products exceeding quotas, addressing China’s problem of excess production capacity. The Dutch government also, for the first time citing national security reasons, took over control of the Chinese-owned chip manufacturer, Nexperia, to prevent technological leakage.
Scott Bessent, US Treasury Secretary, recently stated at the G7 finance ministers meeting in Washington that the United States is intensively consulting with European allies, Australia, Canada, India, and other Asian democratic countries on response strategies, asserting, “We have common interests and a common determination not to let any country blackmail us with critical resources.”
Yao Yuan believes that China’s strategy of rare earth control, on another level, has accelerated US cooperation with other countries in the rare earth field, actually expediting the process of decoupling the US and China economies. Beijing wanted to gain negotiation leverage through pressure but instead has spurred Washington’s determination to completely break away from reliance.
Experts generally believe that China’s escalation of rare earth controls reflects its strategic anxieties under internal and external pressures, but this choice may ironically lead to the opposite effect, exposing decision-makers’ misjudgment of the international situation.
Sun Guoxiang analyzes that China may hope to signal its continued dominance through external pressure, boosting confidence, but if the actions are too extreme or accompanied by continued economic decline, it could cause internal confidence fluctuations and trigger more capital outflows.
Wu Jialong’s assessment is sharper, believing that this strategic error reflects the “small circle decision-making flaws of China’s decision-makers, insufficiently understanding the capabilities and determination of the Trump administration to respond,” leading to repeated misjudgments of the international situation. He bluntly stated that Chinese officials have a lack of deep understanding regarding Western technological reserves and alternatives, causing them to use cards that shouldn’t be played as bargaining chips. Only after playing their hand did they realize the other side was well-prepared, giving the other an advantage.
Yao Yuan added that under the pressure of China’s economic downturn, the hardening of US-China bilateral relations poses greater disadvantages for China. He pointed out that China’s exports still heavily rely on the US and Western markets, and with the escalation of trade and technological wars, it ultimately damages China’s economic interests and future development.
He said that Beijing seems caught in a psychological dilemma of “not being able to show weakness,” knowing that its measures may backfire but still forging ahead regardless; this is very dangerous.