Last week, China’s Ministry of Commerce released an announcement labeled “announcement No. 62 of 2025,” detailing new restrictions on rare earth exports. This decision could impact trade relations between China and the United States, raising concerns about the stability of the existing tariffs truce. China currently holds a near-monopoly on the processing of rare earths, which are critical for various technologies, including smartphones and military equipment.
The new rules will require foreign companies to obtain approval from the Chinese government for exports that contain even minimal amounts of rare earth elements, along with a declaration of their intended use. In response, U.S. President Donald Trump threatened to impose a 100% tariff on Chinese goods, while U.S. Treasury Secretary Scott Bessent characterized the situation as a significant threat to global supply chains.
This escalation in trade tensions follows a period of relative calm after discussions between U.S. and Chinese officials earlier in the year. The urgency of these events is compounded by the scheduled meeting between Trump and China’s President Xi Jinping later this month, with experts suggesting that China’s new restrictions position it advantageously in these talks.
Rare earth minerals are crucial for numerous technologies, including military applications. For instance, an F-35 fighter jet requires over 400 kg of these minerals. Despite the significant role of rare earths in global supply chains, they represent a small fraction of China’s overall economy. Export figures indicate that China’s rare earth exports decreased by over 30% compared to the previous year, though this drop is not expected to severely impact China’s economic stability.
Analysts note that while the U.S. and other countries are working to develop alternatives for rare earth supplies, achieving self-sufficiency may take years. Countries like Australia are viewed as potential challengers to China’s dominance, but their processing infrastructure remains underdeveloped. As China tightens its grip on rare earth exports, the ramifications for international supply chains and trade negotiations remain uncertain.
Source: https://www.bbc.com/news/articles/ckg1jr18z4ko?at_medium=RSS&at_campaign=rss