Trump secures China rare earth deal while escalating AI competition

President Donald Trump is preparing to sign executive orders that would dramatically escalate AI competition with China, despite having just resolved a months-long trade dispute over rare earth metals essential for AI development. The timing appears contradictory, as the White House is simultaneously securing critical AI resources from China while positioning the countries as locked in an “AI arms race.”

What happened: Commerce Secretary Howard Lutnick announced Thursday that China agreed to resume rare earth metal deliveries to the US following Trump’s controversial “Liberation Day” tariffs from April.

• The deal was one of 10 trade agreements signed Tuesday after China had cut rare earth flows in response to the tariffs.
• China maintains a near-global monopoly on rare earth minerals, which are critical for computer chips and other high-tech AI infrastructure.
• Lutnick confirmed that “we’ll take down our countermeasures” in exchange for resumed mineral deliveries.

The escalation: Just one day after the trade deal announcement, reports emerged that Trump plans to sign executive actions designed to accelerate AI development and competition with China.

• The measures would deregulate power grid access, allowing AI companies to bypass current approval processes and immediately connect data centers to civilian power grids.
• Companies like Elon Musk’s xAI have resorted to using “noxious outdoor generators” while waiting for regulatory approval to access grid power.
• Federal land would be made available for sale to tech companies for data center construction, building on broader privatization efforts of federally protected wilderness areas.

Additional measures: The executive orders reportedly include public messaging campaigns and policy frameworks aimed at framing US-China AI competition as existential.

• An “AI action plan” would be rolled out to inform the public about the administration’s AI strategy.
• A propaganda drive would promote the narrative that the US is engaged in a “life-or-death arms race” with China.
• These efforts are designed to justify rapid deregulation and resource allocation for AI development.

Why this matters: The contradictory approach highlights tensions between economic pragmatism and geopolitical positioning in AI policy.

• The US simultaneously depends on Chinese rare earth supplies for AI hardware while portraying China as an existential AI threat.
• Fast-tracking power grid access and federal land sales could accelerate AI development but potentially at the expense of environmental and community concerns.

What experts are saying: Industry observers question whether the “AI arms race” framing reflects genuine security concerns or economic protectionism.

• AI industry reporter Garrison Lovely noted: “Only one superpower has a government commission publicly calling for a militarized race to build superintelligent AI, and it’s not China.”
• Critics suggest the approach has “more to do with preventing free-market competition with China than with any sort of genuine international threat.”