In a rare moment of cooperation amid an era of intensifying rivalry, China and the United States last week reached a temporary agreement to ease some restrictions on the export of rare earth elements. Under the arrangement, Beijing will issue six-month export licenses for critical minerals and magnets-materials that had been tightly restricted since April. The move comes after months of global shortages that disrupted industries from electric vehicles (EVs) to renewable energy to defense production.

At first glance, this deal offers a measure of relief to global supply chains. But the uneasy compromise is no fairy-tale ending. It reflects a deeper, structural dependency of the West on Chinese control over rare earths-an arrangement that may prove politically dangerous and economically costly as the world’s energy transition accelerates and geopolitical tensions deepen.

Rare earth elements (REEs)-a group of 17 metals with unique magnetic, luminescent, and electrochemical properties-are essential to the technologies of the future. Neodymium and praseodymium power magnets in EV motors and wind turbines. Lanthanum and cerium are used in battery technologies. Dysprosium improves heat resistance in motors, while europium is vital for energy-efficient lighting. Without these materials, large segments of the climate economy grind to a halt.

That’s why China’s dominance in this sector carries such weight. While it produces 70% of the world’s rare earth minerals, it controls more than 90% of global processing capacity. This isn’t just about geology-it’s the result of decades of state-driven investment, industrial strategy, and environmental tolerance for the heavy pollution associated with REE extraction and refining.

The West, meanwhile, outsourced much of this activity decades ago, in part due to the environmental costs and regulatory burdens. Now, as Europe and the US rush to decarbonize their economies, they........

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