Via Metal Miner
China is once again weaponizing rare earths elements in the tariff war with the United States. According to media reports, China recently suspended the export of certain rare earth minerals, ostensibly while re-drafting the regulations covering such exports. MetalMiner’s weekly newsletter states that if the issue is not resolved soon, both the halt in rare earth exports and the trade war itself are bound to affect the production of a wide range of products across multiple sectors. As most of us know, rare earths are used in everything from electric vehicles and defense to aviation, electronics and more.
China Remains the Undisputed Rare Earths Supplier
As MetalMiner has reported in the past, China currently produces up to 90% of the global requirement of rare earths. The export control list has seven categories of medium and heavy rare earths, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium-related items.
According to one report, any exporter from China wanting to ship these seven rare earths must now get permission from the Ministry of Commerce. The move could put the U.S. in a tough situation due to its high reliance on China for rare earth materials, among other commodities. China’s licensing process is a closed-system, and it often takes months before licenses are issued.
Recent Diversification Still Dependent on China
According to The New York Times, the fact that China has a near-monopoly of the global rare earth supply means it is in a far better position in the on-going trade war with the U.S., especially where these valuable elements are concerned. In fact, just two years ago, China supplied almost 99% of the world’s requirements. However, the past 24 months have seen at least some diversification in the supply chain.
What’s of even more concern is that China also supplies 90% of the world’s rare earth magnets. Again, these are critical requirements for constructing missiles, cars and electronics. While Japan and Germany also contribute to the supply chain, they remain dependent on China for raw materials.
A Matter of Time
For now, experts feel that existing rare earth stockpiles may cover the immediate supply shortage. However, if the tariff war is not resolved soon, this could become a major problem. Adding to that possibility is the recent supply disruption in Myanmar, which has led to a 20% increase in China’s rare earth exports of late. It will also lead to a jump in prices.
Just about a fortnight ago, China had announced countermeasures as retaliation against tariffs by the U.S. The new export restrictions are a follow-up move. One media report revealed that the U.S. Administration may be chalking up a plan to counter the Chinese.
Quoting the Financial Times, the report said President Donald Trump’s team was in the process of writing an executive order that would allow for the amassing of deep-sea metals. The report said the U.S. Government wanted to have large quantities available on its own soil for future use. Avoid making missteps with sourcing during these tariff-heavy times by reviewing the 5 best metal sourcing practices.
Antimony May Provide a Template of What is to Come
Obviously, whenever China announces a perceived negative move on rare earth supplies, the markets panic. Just before the Trump administration came into office in January this year, China applied existing export limits on antimony and other critical minerals. In response, antimony prices jumped up 40% in one day. In fact, since then, prices have been largely up from about US $14,000 a ton to as much as US $60,000. About 48% of the world’s mined antimony comes from China.
Like other critical minerals, antimony is a strategic metal used in infrared missiles, nuclear weapons, and vehicle batteries. A report from Asia Financial claimed that Beijing has not shipped any antimony to the European Union since September 2024.
This came after China listed antimony on the metals’ control list in retaliation to the EU’s imposition of tariffs on EVs from China. The fresh move to halt exports of other rare earths is similar, and seems designed to bring pressure on the current U.S. dispensation.
By Sohrab Darabshaw
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