On a scale of zero to 10, President Trump told reporters he would rate his “amazing” Oct. 30 meeting with Chinese President Xi Jinping “a 12.”

But Trump’s fantastical ranking glossed over a humbling truth that the weeks preceding the meeting had made clear: China’s near stranglehold on access to rare earth minerals gives it a decisive advantage vis-à-vis the U.S. and everyone else.

Earlier in October, China announced export controls intended to severely limit foreign companies’ access to its rare earths. The audacious new strategy shocked the industrial world and put Beijing in the driver’s seat for future U.S.-China dealings.

It was no coincidence that the announcement preceded Xi’s meeting with Trump. As a result, it was Trump who clearly needed to come to Xi.

During Trump’s first term in office, he appeared to be the one calling the shots. The trade war he instigated with China banned the sale of advanced chip technologies to China and blacklisted dozens of Chinese high-tech companies.

Chinese producers needed Americans to continue buying their goods, he emphasized, bragging in 2016 that “without us, China would be in serious trouble.”

My, how the tables have turned. China currently controls 61 percent of the world’s production of rare earths and more than 90 percent of the subsequent processing. Rare earth minerals and the magnets made from them are vital to the production of missiles, defense systems, electric vehicles, smartphones and advanced medical equipment.

If fully enacted, China’s announced export controls would bring the world’s industrial base to a complete halt. This situation gives new meaning to the word leverage.

Washington was justifiably unnerved by Beijing’s brazen move.

“They have pointed a bazooka at the supply chains and the industrial base of the entire free world,” declared U.S. Treasury Secretary Scott Bessent, “and we’re not going to have it.”

Apparently, neither the Trump administration nor corporate America had expected such a dramatic move from China.

While Beijing had announced a series of restrictions on rare earths and other elements starting late last year, Xi had usually adopted a tit-for-tat response to Trump’s antics.

The all-encompassing curbs announced in October show it is no longer thinking in terms of an eye for an eye. It wants an arm and a leg as well.

China’s strategy seemed to work. Multinational companies urged the White House to resolve the crisis, and a reeling Trump scrambled for a face-saving trade deal. He ultimately achieved little more than a return to the pre-Liberation Day status quo.

China promised to resume purchasing U.S. soybeans and curb the flow of fentanyl and its precursor chemicals to the U.S, and the U.S. also won a temporary reprieve from the latest rare earths restrictions.

Xi got reduced tariffs, a hold on the reciprocal fee increases for Chinese and U.S. ships entering each other’s ports and direct communication channels with Nvidia for purchasing chips.

More importantly, Xi made Trump ask for something.

It remains unclear whether the Trump administration fully recognizes how rare earths have shifted the balance of power toward China. Just days after meeting Xi, Trump claimed on 60 Minutes that within a year and a half, the U.S. would no longer be dependent on Chinese rare earths.

The administration’s plan includes coordinated efforts with allies, fast-tracked permits for new mines and direct equity stakes in mineral and mining firms. While creative, it is an unequivocal pipe dream.

Trump’s 18-month horizon undershoots reality by at least a decade (and probably more). China’s strategy of rare earths domination began more than three decades ago, when Deng Xiaoping prophetically observed, “The Middle East has oil; China has rare earths.”

Moreover, America’s fractured political system shows no sign of being able to jump-start the dormant U.S. rare earths industry.

Training thousands of mining and mineral engineers, developing a myriad of technologies from scratch and softening strict environmental, work and safety standards would cost hundreds of billions of dollars and a commensurate amount of political capital.

Trump can say whatever he wants, but the ground beneath him has shifted. China will no longer tolerate Trump’s economic and high-tech extortion.

After long keeping its cards close to its vest, Beijing has shown a hand that could cripple American industry and imperil U.S. security interests. And rare earths might just be the start. After all, Xi has yet to leverage China’s dominance of pharmaceutical supply chains.

Washington now must adapt to a more self-assured Beijing that is willing to use the economic nuclear option. If the White House does not rethink its containment-oriented China strategy, it will eventually run out of deals.

The geopolitical ramifications of China’s new approach to rare earths are just beginning to be felt.

*Stanley Chao is the author of “Selling to China,” and managing director of All In Consulting, assisting Western companies in their Asian and China business and manufacturing strategies. *

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