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"China leverages its rare earth domination to make Trump blink."

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Russ Roberts (https://trendsingeopolitics.blogspot.com).

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June 10, 2025

Hello, everyone. Today at WPR, we’re covering how China is leveraging its dominance in the rare earths sector in the U.S.-China trade war, as well as how Iraq is using cultural diplomacy in its foreign policy.

But first, here’s our take on today’s top story:

Servicemen from an artillery unit of the 128th Mountain Assault Brigade of the Ukrainian Ground Forces during a drone training session in Ukraine, Dec. 28, 2023 (Photo by Ukrinform/NurPhoto via AP).

Drones: New restrictions from Beijing on manufacturing and exports have rapidly driven up prices for drones and parts from China, which produces at least 70 percent of the world’s commercial drones and dominates production of the components used to make them. (Financial Times)

Our Take: China’s dominance of the civilian drone market has been steadily increasing for more than a decade, but it wasn’t seen as a problem by the West until recently, as the use of drones...

	Subscribe to WPR to read our take on today’s top story.

The U.S.-China trade dispute has continued to deepen, demonstrating the dramatic difficulty of any decoupling of the two countries’ economies, as well as the limited leverage that U.S. President Donald Trump has over Beijing if he wants to avoid huge economic shocks at home.

In the first cycle of the dispute, which began with Trump’s imposition of punishing tariffs in April and culminated last week with a phone call between Trump and Chinese President Xi Jinping, China emerged as having the stronger hand and the ability to wait the U.S. out, even as its own economy languishes.

As columnist Mary Gallagher writes, key to China’s comfortable position is its control of rare earth metals, a sector over which China’s dominance is nearly absolute.

China Is Counting On Its Rare Earths Dominance to Make Trump Blink

By Mary Gallagher China’s dominance over the rare earths sector gives it enormous leverage in the U.S.-China trade war. It didn’t achieve that dominance by accident.

*****

Since the fall of Saddam Hussein in 2003, Iraq has sought to reshape its global image, shifting from a legacy of aggression—most notably the 1990 invasion of Kuwait—to one centered on cultural diplomacy. With a civilization spanning over 6,000 years, the country’s post-Saddam leadership recognized the potential of soft power as a peaceful and effective means of rebuilding its international relationships and national identity.

Successive Iraqi governments also realized that promoting cultural engagement faced less resistance than traditional diplomacy and was an effective starting point for mending long-standing geopolitical tensions, particularly with neighboring countries like Kuwait. As such, cultural diplomacy became a cornerstone of Iraq’s post-Saddam foreign policy.

However, Iraq still has a long way to go in using its cultural heritage to nurture national cohesion and identity, Mohammad Salami writes.

Iraq’s Cultural Heritage Can Be a Double-Edged Sword

By Mohammad Salami Cultural heritage has become a cornerstone of Iraq’s post-Saddam foreign policy. But that same heritage can be more divisive at home.

Question of the Day: What three countries have so far launched Central Bank Digital Currencies, or CBDCs?

China, India and Jamaica The Bahamas, Brazil and India The Bahamas, Jamaica and Nigeria Brazil, Jamaica and Nigeria

Find the answer in the latest WPR Weekly Quiz, then read S. Yash Kalash’s briefing on how digital assets like CBDCs could help address some of the disruption to the global economy caused by Trump’s tariffs.

The fee that copper smelters charge to process raw concentrate into metal sank to a record low last month, falling well below $0 per ton. That means the smelters are effectively paying to refine the copper ore in order to keep their operations running. The price drop is primarily the result of fierce domestic competition within China, which almost entirely dominates the smelting industry.

The domestic competition among Chinese smelters is great for mining companies, not to mention purchasers of the now-cheaper copper. But as Duncan Money wrote last year, it significantly complicates efforts by countries that are trying to create alternative supply chains for critical minerals outside of China, whether for geopolitical or development reasons.

China Has Already Cornered a Key Part of the Critical Minerals Market

By Duncan Money Oct. 30, 2024 | The focus on mining the critical minerals for the green transition overlooks a key area of China’s dominance: the smelting industry.

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Syria’s new central bank governor said that the country will be reconnected to the SWIFT international payment system in a matter of weeks, relinking Syria to the global economy for the first time in more than a decade. The breakthrough comes after U.S. President Donald Trump moved last month to lift U.S. sanctions on Syria, after which the EU followed suit.

The removal of sanctions and reintegration of Syria into the international financial system should open the door to investment in Syria, particularly from regional powers, giving the country its best chance to rebuild in the post-Assad era. As Francisco Serrano reported from Damascus in March, that process will take years and billions of dollars, but the first step will be stabilizing the economy and improving the living standards of Syria’s poorest.

The First Test for Syria’s Transition Will Be the Economy

By Francisco Serrano March 4, 2025 | Rebuilding Syria will take years and billions of dollars. The first step is stabilizing the economy and improving the living standards of Syria’s poorest.

*****

The head of the International Atomic Energy Agency—the U.N.’s nuclear watchdog—said this week that North Korea appears to be building a new uranium enrichment plant, a sign that the country plans to expand its nuclear arsenal. The revelation comes as U.S. President Donald Trump’s administration is still formulating his second-term policy toward Pyongyang. As Theresa Lou wrote recently, Washington needs to reckon with the fact that the strategic environment around North Korea looks far different than it did during Trump’s first term.

*****

Italian, Spanish and Greek sovereign bonds have continued to rally in recent months despite shocks to the global economy, with their borrowing costs falling to their lowest levels in more than a decade. The trend underscores how Southern Europe has managed to flip the economic script in Europe in recent years, although there are some signs that the region’s momentum may not be sustainable. Read more in this briefing by John Boyce.

More from WPR

Sylvia Colombo on Brazil’s retreat from regional leadership. James Bosworth on anti-gang drone attacks in Haiti. Paul Poast on the state of the war in Ukraine. Tangi Bihan on Burkina Faso’s worsening crises.

Read all of our latest coverage here.

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