Business
How China Could Wield Its Control of Rare Earths Against Trump
As President Trump prepares to meet China’s top leader at a summit in Beijing this week, one of the most pressing issues facing the United States, the European Union and Japan lies in China’s restrictions on exports of rare-earth metals and magnets essential to advanced manufacturing.
Manufacturers of commercial aircraft, electronics, cars, semiconductor manufacturing equipment and military hardware are facing acute shortages of rare earths, many of which are refined almost exclusively in China. Prices for some of these metals have soared as much as a hundredfold since Beijing halted most exports in early April last year.
China announced on Oct. 9 that it planned to impose sweeping new restrictions on exports of rare earths and products containing even trace amounts of Chinese rare earths. Three weeks later, Xi Jinping, China’s top leader, agreed at a meeting with Mr. Trump to postpone those measures for a year, though the restrictions issued in April remained in place.
A senior administration official said Sunday that the United States was in frequent contact with China about rare earths, and that it remained unclear whether this week’s summit would produce an agreement to extend the one-year reprieve. But the official, speaking on the condition of anonymity before the diplomatically sensitive meeting, said he was confident the two sides would reach an extension before the postponement expired.
Beijing has offered few hints about its intentions. Asked about rare earths at a news briefing last month, Mao Ning, a Chinese Foreign Ministry spokeswoman, said that “the two sides need to jointly deliver on the important common understandings between the two presidents, and provide greater stability to China-U.S. economic and trade cooperation.”
Business groups are pressing for immediate clarity, warning that Beijing’s restrictions are already disrupting manufacturing outside China and that companies need time to get ready for any tougher measures.
“How do you prepare? We simply don’t know what’s going to happen,” said Jens Eskelund, president of the European Union Chamber of Commerce in China, at a news briefing in Beijing last month.
The American Chamber of Commerce warned in a report released Monday that the rare-earth restrictions were part of a broader effort by China to tighten its grip on global supply chains.
“As China’s control over critical inputs and technologies expands, so, too, does its ability to weaponize this leverage,” the report said.
China’s Ministry of Commerce has said the export-license requirements it imposed last spring on seven categories of rare earths and related magnets are not intended as a tool for leverage in trade or geopolitical disputes, but are necessary because the materials have both military and civilian applications.
But Beijing announced the licensing rules just two days after Mr. Trump imposed steep “Liberation Day” tariffs on China and other countries. China has also linked its control over rare earths to demands that the European Union ease its tariffs on imported Chinese electric vehicles. And after a dispute with Japan over Taiwan in November, Beijing tightened limits on rare-earth shipments to Japan.
Even without the postponed additional restrictions, China has severely reduced exports of rare earths such as samarium, yttrium and dysprosium, which are already in critically tight supply outside China. Samarium, used in commercial aircraft, fighter jets and missiles, sells for about $2 a kilogram inside China but $50 to $500 a kilogram abroad, depending on the level of processing.
China has all but stopped exporting it.
“The aerospace industry is in critical need of samarium,” said Ilya Epikhin, a senior rare-earths specialist at the consulting firm Arthur D. Little. ”It can significantly impact the commercial aircraft production.”
In a statement, Airbus said it “does not buy rare earths or magnets directly, but they are used in our supply chain and we are closely engaging with our suppliers to ensure resilience.” Boeing said that it was working with its suppliers and that it did not see “a near-term impact.”
Yttrium is also scarce outside China, although industry specialists said Beijing had allowed a few shipments to the United States in recent weeks. The Chinese authorities have not explained the decision, which has been interpreted either as a good-will gesture before the summit or a delayed result of China’s pledge in October to permit some exports.
Yttrium is prized as a heat insulator. It is used in semiconductor manufacturing equipment to prevent excess heat from leaking between the tightly packed lasers that cut computer chips, and in jet engines and missiles to shield electronics and other systems from extreme heat.
Dysprosium is widely used in magnets for automotive systems, including brakes, steering and electric motors, as well as drones, including military models. China has restricted exports of dysprosium, which sells for about $200 a kilogram domestically but commands far higher prices overseas, according to Argus Media, a London-based commodity market data firm.
MP Materials, which owns the only rare-earths mine in the United States at Mountain Pass, Calif., said on its earnings call last week that it had begun work on the initial stages of refining the types of rare earths that China had restricted. The company currently produces easier-to-process rare earths at its Mountain Pass mine and refinery.
James Litinsky, MP’s chairman and chief executive, said in an interview that the company would not make the substantial investments needed for the later stages of purifying rare earths, such as yttrium, without long-term purchase commitments from customers. Western manufacturers, however, have been reluctant to sign contracts for fear that China could resume exports of far cheaper material.
Chinese refineries retain a major cost advantage because they process enormous volumes of rare earths each year, much of them used for electric car production. This gives them economies of scale.
Beijing also has some reasons to continue postponing expanded restrictions, which are slated to take effect in November and December. Two weeks after the U.S. midterm elections on Nov. 3, the presidents, prime ministers and other leaders of 21 Asian and Pacific economies are set to gather in Shenzhen, a Chinese metropolis next to Hong Kong, for their annual summit. Chinese officials may not want that meeting overshadowed by global economic difficulties tied to China’s export controls.
If Mr. Trump and Mr. Xi fail to reach an agreement this week, they may have another chance in the coming months. Officials have discussed a possible visit by Mr. Xi to the United States this year to reciprocate Mr. Trump’s trip to China.
Ruoxin Zhang contributed research.
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.
The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.
Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.
Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.
Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.
In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.
The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.
Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.
The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.
The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.
Residents in the city of Monterey Park will be the first in the nation to vote on a permanent ban on data centers Tuesday.
If approved, Measure NDC would prohibit data centers within the city limits and could only be overturned by another vote.
Yard signs saying “No Data Center” in English and Chinese with images of dragons line sidewalks in the San Gabriel Valley city.
As a wave of data center opposition sweeps the country, numerous towns and counties across the U.S. have instituted temporary moratoria and other restrictions on the facilities. But only a handful have instituted indefinite bans, and just four other towns have sent related matters to the ballot.
Supporters are hoping the vote will set a precedent for the rest of the region, where residents are fighting proposals in Vernon and City of Industry.
“This is about as permanent a ban as we can get,” said Steven Kung, co-founder of the group No Data Center Monterey Park. “Winning Measure NDC would send a huge message to the rest of the San Gabriel Valley about how residents don’t want data centers.”
The ballot measure emerged from the fight against a 247,000-square-foot center proposed in 2024 by the Australian-owned investment firm HMC StratCap for a residential area in Monterey Park.
The facility would have sat less than 500 feet away from the nearest home and used three times the electricity of the 60,000-person, predominantly Asian American city.
While the developer touted the potential for jobs and tax revenue, residents expressed concerns about noise and air pollution, rising electricity rates and a potential to lower property values.
The company pulled its plans in late March following public outcry and a March 4 city council vote to extend a temporary data center moratorium and place a ban on Tuesday’s ballot.
In a letter to the city council, HMC StratCap said it would pursue a different use for the land and would not engage in a ballot measure fight.
The city council later banned data centers indefinitely, the first in California to do so, said Mayor Elizabeth Yang. But she’s still been out campaigning for the measure with all four other council members.
“If a council puts in an ordinance, a future council can reverse it too,” said Yang. “With the ballot measure, unbanning it is a lot harder because you need the entire city to vote on it.”
The measure proposes the ban “to protect air quality, drinking water resources, and public health” and “prevent impacts to electricity and water rates.”
While California places third in the country for existing data centers with about 300 facilities, it hasn’t been a hot spot in the recent AI-driven data center boom. High electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in Virginia, Texas, Georgia, Illinois or Arizona.
“Most of California’s data centers are small by today’s standards,” said Shaolei Ren, an engineering professor at UC Riverside who studies how to reduce the environmental impacts of data centers. “Ten years ago, they would be medium-sized, but the power demand for new AI data centers has increased a lot.”
The average operating data center demands 45 megawatts, according to the Washington Post, while the average planned one would draw 430 MW. The one proposed for Monterey Park would have required about 50 MW at peak demand.
As proposals crop up in SoCal, they’re met with fierce opposition. Montebello, El Monte and Baldwin Park have all enacted temporary moratoria, and Alhambra recently banned data centers as part of a zoning code update. City of Industry, Vernon, City of Commerce and Santa Fe Springs are moving in the other direction, trying to court developers and streamline data center approvals. Community groups are fighting that.
Outside the San Gabriel Valley, residents of Coachella and Imperial County are showing up in droves to protest local proposals.
Matthew Shaw, a volunteer with the Coalition for Responsible Data Center Development, who recently published a report on opposition to AI data centers, said a vote to ban them in Monterey Park “would lead to copycats, partially because so many groups are just opposed to any data center development at all.”
While there is no formal opposition to Measure NDC, some building trades like Ironworker Local 433 supported the Monterey Park data center when it was still live before city council. Those in the data center industry are lamenting the state of public opinion.
“These are multi-billion-dollar assets that are built by multi-trillion-dollar companies. These things will get done,” said Mehdi Paryavi, chairman of the International Data Center Authority. “My biggest problem is that our industry does not invest enough in community engagement.”
Paryavi said towns that seek to limit data centers are missing out on thousands of jobs generated by data center construction, operations and customers, as well as faster artificial intelligence speeds and better performance.
Kung said local community organizers are “looking at the empirical evidence” and seeing a ban as a win.
“We’ve never seen a city that embraces a data center and is like, ‘Look how our quality of life has increased, look how all the revenue has gone into citywide improvements,’” he said. “That just doesn’t exist.”
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