Developing Story
US Pragmatic Diplomacy on Rare Earths
The Trump administration is pursuing pragmatic, transactional diplomacy—prioritizing rare earths access over ideological alignment—to build supply chains outside China's dominance, exemplified by projects like South Africa's Phalaborwa Rare Earths Project. Analysts note China's grip on the sector remains difficult to break in the near term.
Importance: 70%Confidence: 80%Mentions: 1Updated: August 26, 2026
## Overview
The Trump administration's strategic interest in rare earths is pushing the United States toward more pragmatic diplomacy as it seeks to rebuild critical mineral supply chains without relying on China, according to observers (SCMP, April). This marks a notable departure from strictly ideology-driven foreign policy, prioritizing resource security even with countries where broader political ties are strained (SCMP, April).
## Key Developments
Observers say Beijing's dominance in rare earths remains too strong to break in the near term, but the US has nonetheless pursued cooperation on resource projects with a range of partners regardless of political friction (SCMP, April). One cited example is the Phalaborwa Rare Earths Project in South Africa (SCMP, April).
## Strategic Significance
This pragmatic turn connects to a broader web of related US initiatives: the Quad Critical Minerals Initiative, partnerships with Brazil on domestic rare earth processing, engagement with African nations on local processing capacity, and European bank financing of critical minerals projects. It reflects a recognition within the administration that decoupling from Chinese rare earth dominance requires flexible, transactional diplomacy rather than rigid alliance-based approaches.
For attorneys and dealmakers, this trend signals growing opportunities in critical minerals project finance, JV structuring, and cross-border resource development agreements, particularly in jurisdictions previously considered lower diplomatic priorities for Washington. It also underscores continued geopolitical risk tied to China's rare earth export leverage, a factor relevant to supply chain risk assessments across manufacturing, defense, and clean energy sectors.
## Things to Watch
- Progress of the Phalaborwa Rare Earths Project and similar US-backed ventures
- Whether pragmatic diplomacy extends to countries with adversarial relationships with the US
- China's countermeasures to protect its rare earth market dominance
- Coordination with allies (Quad, EU) on parallel critical minerals strategies