President Donald Trump and Australian Prime Minister Anthony Albanese have signed a new rare earth partnership deal — a framework designed to fortify U.S. access to Australia’s mining and processing of critical minerals, while cutting China out of the global supply chain it currently dominates.
The agreement, worth at least $1 billion in financing, marks the boldest step yet in Washington’s campaign to “de-risk” global dependence on China, just days before Trump’s long-anticipated face-to-face meeting with Chinese President Xi Jinping at the APEC summit in Gyeongju, South Korea.
“I don’t want them to play the rare earth game with us,” Trump said, vowing triple-digit tariffs if Beijing continues restricting exports. “I could threaten them with many other things.”
The new pact underscores a shifting global power equation: as China tightens its export chokehold on materials essential for electronics, defense systems, and renewable energy.
The U.S. is scrambling to build an alternative axis of supply — anchored in Australia’s vast resource fields and bolstered by allies in Japan, Malaysia, and South Korea.
Trump’s upcoming Asia tour, which includes ASEAN meetings in Malaysia and bilateral talks in Tokyo, is being carefully choreographed to build momentum ahead of the Gyeongju showdown.
Treasury Secretary Scott Bessent has already met with China’s Vice Premier He Lifeng, describing talks as “frank and detailed.”
But the road ahead is anything but smooth. Analysts warn that despite the flurry of deals, China still controls nearly 90% of global rare earth processing capacity, giving Xi significant leverage at the table. “Even with reshoring and friend-shoring efforts, the U.S. is still many years away from self-sufficiency,” Raymond James analysts Ellen Ehrnrooth and Ed Mills noted.
Trump’s aides say the U.S.-Australia deal is “about taking the global economy and making it less exposed to Chinese extortion.”
Yet Trump himself has hinted that the Gyeongju meeting could yield a broader bargain — or a new confrontation. “I think we’ll work out something good for both countries,” he said, adding that his threat of 100% tariffs remains on the table for November 1.
Behind the optimism lies a familiar volatility. Trump’s willingness to swing between cooperation and confrontation has left markets jittery — and Xi’s team cautious.
Both leaders are walking into the South Korea summit knowing that a misstep could tip the rare-earth standoff into a full-blown economic Cold War.
