Updated on: Oct 14, 2025 | 8:56 PM IST
New Delhi/Washington: The geopolitical and economic stakes over rare earth minerals have escalated sharply as the United States has explicitly identified India as a potential ally in its confrontation with China. U.S. Treasury Secretary Scott Bessent accused Beijing of deploying restrictive export controls on key minerals essential to the auto, electronics, and defence industries, framing the dispute as “China versus the world.”
Rare earths, a group of 17 critical metals used in high-tech industries, including electric vehicle magnets, semiconductors, and advanced defence systems, have become a flashpoint in the evolving trade and industrial policy confrontations between the U.S. and China.
Bessent Criticises China’s Export Controls
In a Monday interview with Fox Business, Bessent said, “They have pointed a bazooka at the supply chains and the industrial base of the entire free world. And, you know, we’re not going to have it.” He described China as a “command-and-control economy” and emphasised that the U.S. would assert its sovereignty “in various ways,” rejecting attempts by Beijing to influence global trade.
Bessent further suggested that the U.S. had been consulting with allies, noting, “We will be meeting with them this week, and I expect that we will get substantial global support — from the Europeans, from the Indians, from the democracies in Asia.” While he did not elaborate on the nature of the support expected from India, his statement signals a push for strategic alignment among democracies reliant on rare earth imports.
Tariff Escalation and Trump’s Response
The comments come amid heightened tension following President Donald Trump’s announcement of 100% additional tariffs on China in response to its export restrictions. Trump has also hinted at cancelling a planned meeting with President Xi Jinping at the upcoming Asia-Pacific Economic Cooperation (APEC) summit, signaling a potential escalation in the tariff and trade disputes.
Bessent noted in a separate interview with the Financial Times that China is “in the middle of a recession/depression, and they are trying to export their way out of it,” highlighting concerns over Beijing’s attempts to leverage its dominance in rare earth production to mitigate domestic economic pressures. China, which remains the world’s largest producer of rare earth minerals, has accused the U.S. of applying double standards in its tariff policies.
India in the Middle
India finds itself in a complex position amid these tensions. The country faces significant U.S. tariffs of up to 50% on various goods and has recently pursued engagement with China to reset bilateral ties following border clashes several years ago. Prime Minister Narendra Modi’s eastward diplomatic efforts, including recent visits to Beijing, have drawn mixed signals from Washington.
While Trump has alternated between praise for PM Modi as a “good friend” and threats of further tariffs, the U.S. is reportedly seeking India’s cooperation in countering China’s export restrictions. This places India in a delicate balancing act, navigating its strategic autonomy while maintaining economic and diplomatic ties with both the U.S. and China.
Trade Negotiations Continue
Despite the emerging tensions, dialogue between India and the U.S. continues. Senior Indian officials are scheduled to visit Washington later this week to advance negotiations on a proposed Bilateral Trade Agreement (BTA). According to sources, the discussions are progressing, with the first tranche of the pact targeted for conclusion between October and November 2025.
The BTA discussions began earlier this year, shortly after Trump regained power, with both governments directing officials to address key trade barriers and tariff issues. So far, five rounds of negotiations have taken place, with progress occasionally slowed by disputes over tariffs and market access.
Strategic Implications
The rare earths dispute highlights the broader geopolitical competition between the U.S. and China, especially in sectors critical to technological and industrial leadership. The U.S. strategy appears aimed at forming an alliance of democracies, including India, to diversify supply chains and reduce dependence on China.
For India, this presents both opportunities and challenges. On one hand, India could benefit from increased strategic collaboration and potential technology transfers in critical minerals. On the other, alignment with U.S. positions could complicate India’s longstanding policy of strategic autonomy and its recent efforts to maintain balanced relations with China.
Conclusion
The rare earths issue underscores the intersection of trade, national security, and international diplomacy. With the U.S. and China increasingly clashing over industrial supply chains, India’s role as a key mineral producer and emerging economy places it at the center of high-stakes negotiations. As the bilateral trade talks progress and global attention focuses on rare earths, the coming months will be crucial in determining how India navigates its relationships with the two superpowers, ensuring economic interests while safeguarding strategic autonomy.
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