By Tim Hepher and Florence Loeve

PARIS, Jan 8 (Reuters) - France's aerospace industry on Thursday expressed concern over the "weaponisation" of global supply chains as major powers pursue their geopolitical agendas, and warned that rare earths remained a pressure point despite a U.S.-China trade truce.

Olivier Andries, president of France's GIFAS aerospace association and CEO of engine maker Safran, said 90% of the industry's needs for rare earths were supplied by China, which is at odds with Washington over trade.

"There is a trend towards the weaponisation of the supply chain, towards using the dependency on critical supplies to create a geopolitical advantage. That is particularly the case for rare earths which is a very sensitive topic," he said.

The aerospace industry has largely avoided being caught up in a U.S.-led tariff war because the supply chains of major manufacturers such as Airbus and Boeing are deeply interwoven.

But there are persistent worries over the availability of the specialist minerals that can be found in small but significant quantities in modern products including jet engines.

Andries said concerns did not just involve the quantity of rare earths such as samarium but also what he called "intrusive" questions from Chinese authorities over their final destination, mirroring an extra-territorial playbook developed by the U.S.

The issue should be tackled at a European level, he added.

Andries, speaking at a GIFAS briefing on a day when France's deeply divided parliament was returning from its end-year break, said he was also concerned over the continued lack of a domestic budget for 2026, adding parliamentarians had "lost direction".

French Prime Minister Sebastien Lecornu is making a fresh attempt to pass the budget following emergency legislation.

So far, France's defence spending is on track, Andries said, as Europe boosts spending in the face of U.S. political pressure and the ongoing conflict in Ukraine.

EUROPEAN SOVEREIGNTY

Asked about the future of the Franco-German-Spanish FCAS fighter project, riven by disputes between Airbus and Dassault Aviation, Andries said: "There is a very strong political will at the highest level in France and Germany to go ahead. But for things to advance, you also need to have agreements and the manufacturers accepting to work together".

France's Dassault has criticised a decision by Germany to buy U.S. F-35s in addition to backing European programmes.

Asked about renewed threats by U.S. President Donald Trump to take over Greenland, Andries said this would add more fuel to the debates over buying foreign weapons.

"These rather uninhibited messages only increase the growing awareness in Europe that while we are of course partners and allies of the United States, we have to cultivate our own sovereignty and not totally entrust our future to another state," Andries told reporters.

The growing dispute over the Danish territory has alarmed NATO allies and taken on a new urgency after Trump followed through on threats to topple Venezuelan leader Nicolas Maduro.

Andries urged French suppliers to invest in coming years to be ready for both rising European arms spending and the next generation of airliners, aiming to increase their role in both.

(Reporting by Tim Hepher, Florence Loeve, Editing by Louise Heavens, Jane Merriman and Susan Fenton)