After securing unlimited minerals pledge from Anwar, US declares victory against China

Prime Minister Anwar Ibrahim's decision to pledge an unlimited supply of rare earth elements to the US may have played a role in removing China's leverage over the much-needed minerals, judging by recent remarks from US Treasury secretary Scott Bessent.

Speaking to the Financial Times, Bessent declared a major victory against China, stating that the US has effectively neutralised China’s leverage over minerals, thanks in part to the so-called reciprocal trade agreement signed by Anwar on Oct 26.

"Within two years, the US will have fully diversified its rare earth sources. That includes Malaysia and our other partners," he said. "We are no longer at the mercy of Beijing."

The paper also quoted him as saying that China "made a real mistake" when it threatened to restrict exports of rare earth elements, arguing that the move had now backfired after the US managed to secure alternative sources.

"They’ve made a real mistake. It’s one thing to put the gun on the table. It’s another thing to fire shots in the air," said Bessent.

He said the US had already secured "offsetting measures", including partnerships with Malaysia and other regional producers, that would end China’s dominance in the sector within two years.

"I don’t think they’re able to do it now because we have offsetting measures," he said.

"Chinese leverage over the US in rare earths will last no more than 12 to 24 months."

Earlier this year, China responded to President Donald Trump's tariff measures by suspending rare earth exports to the US, on condition that Washington remove its curbs on Chinese companies.

China, the world's largest exporter of rare earth elements, had used its dominance as leverage in its trade war with the US.

However, on Oct 26, that leverage appears to have been undermined when the US secured a controversial deal with Malaysia.

Under the deal, which has sparked public outrage for what experts described as a surrender of Malaysia's trade independence, the Anwar administration pledged to facilitate the development of its rare earth elements sector by partnering with US companies and committing not to ban or impose quotas on their exports to the US.

With China's leverage gone, Beijing was forced to make concessions to the US.

A trade pact reached between China and the US in South Korea last week saw China agreeing to postpone its export controls on rare earth metals.

According to a White House statement, China will issue licences valid for exports of rare earths, gallium, germanium, antimony and graphite "for the benefit of US end users and their suppliers around the world".

Beijing also agreed to boost purchases of US soybeans and allow American investors to take control of TikTok’s US operations.

In return, Washington will pause the so-called reciprocal tariffs on China, as well as halt plans to implement a 100% tariff on Chinese exports to the US that Trump had earlier threatened.

In the FT report, Bessent said the US and China had now reached an "equilibrium", but added that the outcome was a strategic win for Washington.

"President Trump’s trip to Asia has reinforced America’s position as the leading destination for capital and investment," he said.