US and Japan Seal Rare Earths Pact to Cut China Dependence

In a landmark development aimed at reshaping global resource supply chains, the United States and Japan have signed a new agreement to secure access to critical minerals and rare earths. The accord, announced during President Donald Trump’s visit to Tokyo, marks a key step in Washington’s strategy to reduce reliance on China for essential materials powering electric vehicles, semiconductors, and defence systems.

Strategic Deal for Supply Chain Resilience

The framework agreement, finalised at Tokyo’s Akasaka Palace, seeks to ensure the “resilience and security” of rare earth and critical mineral supply chains. Prime Minister Sanae Takaichi, Japan’s first female leader, described the accord as the beginning of a “new golden era” in US-Japan relations. President Trump hailed the partnership as “the greatest alliance in the world,” promising unwavering support to Japan’s leadership in the Indo-Pacific.

The deal follows similar memoranda signed with Malaysia and Thailand, expanding Washington’s Indo-Pacific network for rare earth production and diversification. It also builds upon the recent $8.5 billion framework agreement between the US and Australia, aimed at boosting critical mineral extraction and processing.

China’s Dominance and Global Tensions

The Tokyo accord comes amid heightened concerns over Beijing’s control of the rare earth industry. China currently accounts for about 70 per cent of global mining and nearly 90 per cent of refining capacity for rare earth elements, vital for industries such as renewable energy, electronics, and defence. Beijing’s recent expansion of export controls — requiring government approval for even trace quantities of these materials — has triggered fears of supply disruptions.

US Treasury Secretary Scott Bessent called China’s move “a bazooka aimed at global supply chains.” In response, the Trump administration has intensified efforts to strengthen alliances and diversify sources of these critical inputs through regional cooperation.

Economic and Diplomatic Implications

Experts believe the pact has both strategic and economic motivations. By collaborating with Japan — a technological powerhouse — the US aims to secure raw material processing, recycling, and advanced manufacturing capabilities outside Chinese influence. However, analysts caution that establishing alternative supply chains may take up to a decade, given China’s entrenched dominance.

“This agreement changes the geopolitical equation,” said Charles Chang of Fudan University. “Even if production takes time, it gives Washington leverage in future negotiations with Beijing.”

Exam Oriented Facts

• US and Japan signed a rare earth and critical minerals deal in October 2025 during Trump’s Tokyo visit.
• Japan’s Prime Minister Sanae Takaichi called it the start of a “golden era” in bilateral ties.
• China controls about 70% of rare earth mining and 90% of refining capacity worldwide.
• The pact follows similar US agreements with Malaysia, Thailand, and Australia under the Indo-Pacific strategy.

Symbolism and Strategic Messaging

Beyond economics, the agreement serves as a geopolitical signal ahead of Trump’s upcoming meeting with Chinese President Xi Jinping in South Korea. By aligning closely with Tokyo, Washington aims to showcase a united front among democratic allies in the Indo-Pacific. In a gesture of goodwill, Prime Minister Takaichi presented Trump with 250 cherry trees for America’s 250th anniversary and fireworks from Akita Prefecture for the US Independence Day celebrations — blending diplomacy with symbolism during a pivotal moment in global trade relations.