In the end, it wasn’t tanks, tariffs, or technology that brought US President Donald Trump back to the negotiating table with China. It was a set of obscure elements most Americans have never heard of-and which the modern world can’t function without.“FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA,” Trump posted on Truth Social, his digital megaphone of choice, declaring a new trade pact with Beijing was “DONE,” pending final approval from both him and President Xi Jinping.For a president who once claimed China had “no leverage,” it was a stunning admission. While Washington had spent years building up chip sanctions, export bans, and visa restrictions, Xi Jinping had something simpler and more powerful: control of the supply chain of rare earths.Rare earths-specifically the nickel-sized magnets made from them-have become China’s ace in an increasingly antagonistic trade rivalry. The magnets power everything from electric vehicle motors to F-35 fighter jets. And when Beijing slowed exports this spring, it didn’t just rattle Washington. It paralyzed factories from Chicago to Mumbai.The big picture: Magnets that move marketsIn April, as Trump pushed tariffs on Chinese imports past 100%, Beijing countered with an export-licensing regime that slowed the global flow of rare-earth magnets to a crawl.

Chinese producers, once loosely regulated, now required detailed applications specifying the final use of every shipment-including, in some cases, photographs of the final products.“They are showing their muscles,” one unnamed company told The Wall Street Journal, after struggling to comply with China’s sudden documentation demands.But when China slammed the brakes on rare earth shipments, it created a cascading industrial crisis:

The magnets themselves weren’t the only problem.

They became a proxy for China’s strategic intent-and its willingness to weaponize dominance.“This is not just about minerals,” said Gracelin Baskaran, director of the critical minerals program at CSIS. “China’s dominance puts American companies at direct risk given that any sort of agreements that have been made can be reneged on.”

A trade deal-on China’s termsBy June, Beijing’s strategy had succeeded in creating global unease and American urgency.

When negotiators met in London last week to hammer out a fresh pact, the conversation tilted toward raw materials, not rhetoric.In Trump’s telling, the US walked away with a win: “WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%.” But beneath the bluster, the facts point to a Chinese strategic victory.The deal, as relayed by US commerce secretary Howard Lutnick, involved China front-loading rare-earth shipments critical to “US auto and defense firms,” while Washington would “ease some of its own export controls.”

In short, China got what it wanted-greater access to US markets for students and products-without giving up control of its minerals.Xi, who did not publicly comment, appears to have made clear that any further exports are conditional, governed by a new licensing system that gives Chinese regulators granular visibility into global supply chains.Shan Guo, a partner at Hutong Research in Shanghai, put it bluntly: “Both sides would want deterrence… There is little political trust in each other.”Not rare, but invaluable

A history of leverageThis wasn’t China’s first use of rare earths as a geopolitical tool. In 2010, amid a maritime dispute, Beijing quietly halted shipments to Japan. The result? Japan began a decade-long process of building its own supply chain.The lesson for Washington might be similar. Yet in the near term, the US remains dependent. And Trump-despite his posturing-was forced to concede.

The White House, which had vowed that “China needs to make a deal with us, we don’t have to make a deal with them,” found itself asking for precisely that.The Wall Street Journal’s Christopher Wood called it “damage control” disguised as diplomacy. “What’s become clear… is that this rare-earths issue has got real leverage for Beijing,” he said.The element Xi won’t let go

(With inputs from agencies)