Treasury Secretary Scott Bessent said that China’s control over rare earth materials will be broken within the next two years, marking an aggressive timeline for the United States to ramp up domestic production.
The comment comes just one day after President Donald Trump met with Chinese President Xi Jinping in South Korea, where the leaders agreed to a truce over China’s export restrictions of rare earths. China, which dominates the global supply of critical minerals and rare earths used in key defense and energy applications, has used it as leverage against the United States.
Bessent told the Financial Times on Friday that the two leaders reached an “equilibrium,” but added that China would not be able to continue to use its leverage of critical minerals over the United States much longer.
“I don’t think they’re able to do it now because we have offsetting measures,” Bessent told the publication, adding that the U.S. would be able to find alternative supplies of rare in no more than 12 to 24 months.
It is commonly thought that it would take 10 years or more to produce rare earth elements domestically, thanks to onerous permitting requirements, meaning that Bessent’s timeline is highly ambitious.
The Trump administration has taken unusual measures to boost the domestic supply of critical minerals and rare earths as the prospect of conflict with China has loomed larger. It has reached agreements with countries like Australia to diversify the supply. It has also taken the remarkable step of taking a direct ownership stake in critical mineral and rare earth companies to help boost production.
According to the U.S. Geological Survey, between 2020 to 2023, the U.S. imported nearly 56% of its rare earth compounds and metals from China.
On Thursday, China agreed to suspend its recent export restrictions on rare earths for one year.
“China has alerted everyone to the danger. They’ve made a real mistake,” Bessent said. “It’s one thing to put the gun on the table. It’s another thing to fire shots in the air.”
Specifically, China has agreed to lift the restrictions it imposed earlier this month on five additional rare earths and technologies related to production. The restrictions require companies to gain permission from the Chinese Ministry to export rare earths or related technologies.
Still, the agreement does not address previous restrictions. In April, China suspended exports of seven types of rare earth metals and magnets, requiring companies to gain a license from the ministry for any exports.
Throughout the week, Trump visited several Asian nations, where he made agreements to diversify the supply chains of critical minerals.
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Bessent called the trip successful.
“The US has the world’s premier military, the strongest economy and financial centre with the dollar as the world’s reserve currency, and is the world’s leader in technology and innovation,” he said. “President Trump is cementing and expanding these strengths, and the Chinese know this.”
Bessent told the FT that the United States and China will sign the deal over the coming weeks and believes it will hold, noting that there are “better communication channels now.”
