BEIJING, May 20, 2026, 17:05 CST
China said Wednesday it will talk with the U.S. about “reasonable” concerns on rare-earth export controls, but defended its rules as legal. Washington gets a chance to work on supply-chain issues, but not the broader rollback it wanted. Rare earths go into high-strength magnets, semiconductors, cars, and weapons. Export controls mean rules that can slow or block shipments. Reuters
Pentagon officials want drones to move from a niche solution to a standard weapon. The Drone Dominance program says its first Gauntlet competition finished with 30,000 drones ordered. The program also plans to buy over 200,000 drones by 2027.
White House officials said after President Donald Trump met with President Xi Jinping in Beijing that China plans to address U.S. shortages of yttrium, scandium, neodymium and indium, along with some restrictions on rare-earth production and processing equipment. The statement did not confirm if Beijing would remove the controls.
Drone plan looks straightforward but tough to pull off in practice. The War Department expects its $1 billion program to pay for around 340,000 small unmanned aircraft systems over two years. First units will cost $5,000 each, with later ones priced at $2,300. Pete Hegseth said the plan aims to push costs down and increase capability.
Pentagon Drone Dominance program manager Travis Metz told Congress in March that the first Gauntlet winners are set to get orders for 30,000 one-way attack drones with delivery over five months. Metz said the Pentagon’s order depended on whether military operators “would take it to war.” Breaking Defense
Magnet production is still the main bottleneck. Goldman Sachs said in October that China has 69% of rare-earth mining, 92% of refining, and 98% of magnet manufacturing. Western companies like Lynas Rare Earths, Solvay and MP Materials could help with supply, but Goldman said reliance on China is still heavy.
Bloomberg took a wider look at the issue last week, saying rare earths are the backbone of modern tech and that China uses its stronghold as geopolitical leverage. For Washington and its allies, the challenge is more than mining extra ore. They want to add processing and magnet production that skips China.
There’s a catch. Cory Combs, associate director at Trivium China, told Reuters on Monday the gap between U.S. and Chinese statements is “not ideal, but fine” since both want to keep things stable. Paul Triolo at DGA-Albright Stonebridge said slow or politically dependent licensing could cause “higher input costs, allocation problems” and hold up expansion at firms that depend on critical minerals. Reuters
It’s not just drones feeling the squeeze. Yttrium goes into coatings for turbine blades in aircraft engines and power plants, shielding them from high heat. Indium phosphide, a compound of indium, is found in photonic chips that use light to move data instead of electricity, and in fast optical lasers.
EU is taking steps too. The bloc has put tungsten, rare earths, and gallium on the shortlist for its first shared critical-minerals stockpile, according to three sources speaking to Reuters. It’s among the EU’s more direct moves to cut back on Chinese supply.
U.S. rare-earths got a signal from Beijing, but it’s controlled friction, not a solution. Licenses might be issued. Some cargo could move again. The Pentagon keeps pushing drones, but China still has most of the supply chain, and that’s the problem Washington hasn’t fixed.
