Economic Report · Sector & Special Reports
Critical Minerals: The New Frontline in US-China Economic Competition
July 2026 · By The Edge Research Team
Report summary
The United States and China have entered a deeper phase of strategic economic competition centered on critical minerals and rare earth elements. What began as a tariff dispute has matured into a contest over the materials underpinning advanced manufacturing, artificial intelligence infrastructure, semiconductors, electric vehicles, renewable energy, and defense systems. Over the past year the contest moved from rhetoric to repeated, concrete supply shocks, and to a sweeping policy response from Washington and its allies. The escalation has proceeded in six distinct steps. Beijing answered new U.S. tariffs in April 2025 with export-licensing controls on seven medium and heavy rare earth elements and related magnets. A second, far broader wave followed on 9 October 2025, extending controls to five additional elements and, for the first time, asserting extraterritorial reach over any foreign-made product containing 0.1% or more of Chinese-origin rare earths or made with Chinese processing technology. After a tense standoff, both sides stepped back at the APEC summit in Busan: China suspended the October measures for one year, to 10 November 2026, while the April controls and core licensing machinery remained firmly in place. In January 2026 China tightened dual-use controls specifically targeting Japan, and in March 2026 it codified a comprehensive supply-chain security framework (State Council Order 834).
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The Edge Special Report — July 2026
The United States and China have entered a deeper phase of strategic competition centred on critical minerals and rare earth elements, the materials that underpin advanced manufacturing, artificial intelligence infrastructure, semiconductors, electric vehicles, renewable energy and defence systems. This special report traces how the contest moved from a tariff dispute to repeated, concrete supply shocks over the past year, and to the most assertive industrial-policy response Washington and its allies have mounted in the sector’s history.
It maps China’s structural dominance across the value chain, from mining to refining and magnet manufacturing, the calibrated escalation of export controls that culminated in the 22 June 2026 listing of MP Materials and USA Rare Earth, the accelerating global diversification effort, and the surge in demand from artificial intelligence and defence. It closes with the near-term catalysts, including the Section 232 negotiation deadline of 13 July 2026 and the November 2026 review of China’s suspended October controls, and what they mean for policymakers and investors.