According to Firstpost, the White House held a closed-door meeting in late July to discuss "a reset of ties with Myanmar”. President Donald Trump was presented with a proposal that specifically focused on Myanmar's rare earth resources. The aim was to use diplomatic efforts to seize the country’s critical rare earth mineral deposits from Chinese companies.
The proposal suggested that the U.S. should appoint a special envoy to facilitate an agreement between the U.S. and Myanmar's military government or local armed groups, in order to establish on-the-ground cooperation in rare earth resource-rich areas like Kachin State. It also recommended taking advantage of the opportunity to reduce the 40% tariff imposed by Trump on Myanmar in exchange for cooperation from the military government. If necessary, the U.S. could escalate the leverage by lifting sanctions on the military government and its allies. Additionally, it proposed considering collaboration with India to handle some of the heavy rare earth exports from Myanmar to lower costs, and appointing a special envoy to oversee these tasks. Officials from Vice President JD Vance's office revealed that in mid to late July, during a meeting held at the Vice President's office, some of the proposal's suggestions were discussed in detail. Participants in the discussion included the former head of the American Chamber of Commerce in Myanmar who runs a security firm in the country.
Previously, after the Myanmar military launched a coup in 2021, the U.S. announced that it would avoid direct talks with the country’s military leaders, effectively freezing diplomatic relations between the two countries. Therefore, the proposal also emphasized that, in addition to negotiating with the ruling military government, the U.S. could consider reaching a peace agreement with the Kachin Independence Army (KIA) or even directly cooperating with the KIA, while minimizing contact with the military government as much as possible.
Analysts pointed out that it is important to note that this proposal is not some minor suggestion but rather the result of collaboration among a U.S. lobbyist with actual business interests and political connections to Myanmar, a former advisor to Aung San Suu Kyi, and legal representatives of security companies operating in the region.
Analysts have stated that, although the Trump administration has not officially announced a shift in its policy towards Myanmar, at least three signals indicate that the White House is re-evaluating its relationship with Myanmar more pragmatically:
1. Restarting diplomatic evaluation procedures: Since Trump took office in January 2025, the White House has begun reviewing its diplomatic and economic engagement policies with Myanmar. Although still in the early exploratory stages, it shows an emerging interest in engaging with the military government.
2. Partial lifting of sanctions: In July 2025, the U.S. Department of the Treasury announced the removal of several Myanmar military-related entrepreneurs and companies from the sanctions list. While officials emphasized that this does not indicate a broader policy change, it is undoubtedly a typical diplomatic gesture.
3. Myanmar's proactive approach: According to CNN, Myanmar’s military leader Min Aung Hlaing has sent a letter to Trump expressing a desire to reduce tariffs, as well as dispatching a negotiation team, reflecting a positive attitude toward establishing contact with the U.S.
Since last year, China has announced a series of targeted measures regarding rare earth exports to the U.S. and the West, which have posed tangible challenges to the operations of relevant industries in the U.S. and the West. In terms of importance, the significance of rare earths to industrial technology has long been an undeniable fact. They are widely used in advanced equipment such as missile systems, F-35 fighter jets, jet engines, lithium batteries, and medical devices. Although the U.S. possesses some rare earth deposits domestically, it has relied on China's rare earth products for decades due to factors like environmental regulations and economic efficiency. Currently, China controls about 90% of the world’s rare earth processing capacity, holding an overwhelming monopoly.
In terms of rare earth sources, Myanmar is a major supplier of rare earths to China, especially with regard to heavy rare earths such as dysprosium and terbium. This means that Myanmar possesses a high strategic value. In 2024, Myanmar’s rare earth production reached 31,000 tons, accounting for 7.9% of global output, ranking third in the world. According to Chinese customs data, China imported about 77,300 tons of rare earths in 2024, with over 50% of that coming from Myanmar. If Myanmar were to lean towards the U.S., it would have a significant disruptive impact on China’s rare earth supply chain.
U.S. industry insiders have pointed out that as KIA controls the main rare earth production areas in northern Myanmar, it has become increasingly disillusioned with cooperation with Chinese companies and is more inclined to work with “generous” Western firms. While this may be more of a lobbying tactic rather than a fully objective factual statement, it also reflects the shifting interests of some local forces in Myanmar regarding resource development and the recalibration of their economic partnerships.
The Chipwe-Pangwa mining belt in Kachin State is currently controlled by KIA. According to industry insiders quoted by Reuters, three months ago, U.S. officials attempted to establish contact with the KIA through a third party to understand its rare earth operations and potential cooperation paths.
However, U.S. experts on Myanmar have pointed out that if the U.S. intends to export rare earths from Kachin State through India, it could likely provoke Chinese intervention. This is because these mining areas are located on the China-Myanmar border, and if China perceives that its rare earth supply is being "intercepted", it is highly likely to take countermeasures or block the supply. Moreover, the rugged terrain and poor road infrastructure in Kachin State make it a challenging task to establish a supply chain, processing facilities, and transportation pipelines in the short term. An anonymous Indian official stated that even though the White House is considering this plan, it would take several years of preparation before it becomes feasible.
However, researchers at ANBOUND believe that a series of new developments from India since this year are also noteworthy. Hindustan Zinc (HZ), India’s largest zinc producer, has clearly announced its plans to enter the rare earth industry. Although its senior management has publicly acknowledged that HZ still faces many bottlenecks and challenges in terms of acquiring relevant resources and expanding domestic production and processing capabilities, they also stated that, based on the company’s strong financial performance and fiscal strength in recent years, HZ will continue to increase its investment in the rare earth sector and gradually reduce its dependence on China. Given the shared objective of containing China, the possibility of the U.S. and India teaming up to divert Myanmar’s rare earth reserves should not be underestimated.
Moreover, analysts believe that, based on the U.S.'s recent moves, the country has firmly decided to change its current situation of relying on China for rare earth supplies:
1. Domestic Reboot: U.S. company MP Materials, after receiving financial backing from the Pentagon, has gradually resumed production of products like neodymium magnets. In July 2025, Apple signed a USD 500 million long-term supply agreement with MP, including a USD 200 million upfront payment and investment in rare earth recycling lines.
2. Overseas Allies' Strategy: Australian companies have also started producing key materials like dysprosium oxide, praseodymium, and neodymium.
3. Advancing Technological Innovation: U.S. company Xerion Advanced Battery Corp claims that its refined cobalt production costs are now lower than those in China.
Additionally, one point that had been overlooked in previous analyses is that U.S. research institutions have been focusing on biotechnology for rare earth extraction for over a decade. Progress has been made in technological development, and once it reaches the practical stage, it could very likely become a new pathway to dilute and challenge China’s control over rare earth resources.
Relevant analysts believe that, in summary, the U.S. actually has no shortage of technology, capital, or resources for rare earth extraction. It was only in the past that, due to environmental and economic factors, the U.S. intentionally downplayed these capabilities. Once rare earths are deemed a strategic resource, environmental costs and economic efficiency will take a backseat to "national security”.
Therefore, when it comes Myanmar's rare earth resources, whether it is to further strengthen the U.S. domestic industry or weaken China’s global control over resources, for the U.S., using rare earth resources as a key entry point to deepen its intervention in Myanmar and the broader Southeast Asian situation holds significant strategic importance.
Final analysis conclusion:
Researchers at ANBOUND believe that, although Trump has not yet made a final statement on this policy proposal, several factors are already shaping a diplomatically "operable rare earth strategy". These include the internal assessments within the White House, the tentative easing of sanctions, Myanmar’s proactive gestures, and the potential disillusionment of local armed groups with Chinese companies. While geographical realities, political risks, potential Chinese intervention, and gaps in logistics and processing capabilities still present major obstacles to U.S.-Myanmar rare earth trade, the likelihood of the U.S. advancing this agenda should not be underestimated. If all of this were to come to fruition, Myanmar would not only become a focal point of Southeast Asian conflict but also the frontline in the regional strategic competition between the U.S. and China over critical resources.
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Zhou Chao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.
