The escalating trade war between the U.S. and China has taken a sharp turn, with Beijing firing its most strategic shot yet — restricting exports of seven vital rare earth minerals.
The move comes in retaliation to President Donald Trump’s recently announced 34% tariffs on Chinese goods and threatens to cripple sectors reliant on advanced technologies.
Rare earths — a group of 17 minerals essential to smartphones, electric vehicles, military hardware, and clean energy — are processed predominantly in China, which controls 92% of the global refining capacity.
While the U.S. mines some of these elements, it lacks domestic capacity for large-scale processing, leaving industries dangerously exposed.
The immediate impact is already being felt. Shipments to at least five American and European firms have been suspended, with exporters scrambling to understand China’s new licensing regime.
“We don’t have inventory in the U.S.,” warned Joshua Ballard, CEO of USA Rare Earth. “This is China’s best play.”
Former President Xi Jinping once called rare earths China’s “strategic resource.” Now, that strategy is materializing. Beijing’s move targets not just raw materials, but finished products — from magnets to alloys — meaning deeper disruptions ahead.
Trump has responded by launching a probe into critical minerals, and American firms are rushing to fill the gap.
Companies like Phoenix Tailings and USA Rare Earth are expanding domestic production, but experts warn rebuilding the U.S. supply chain could take years.
As China flexes its mineral muscle, the trade war has morphed into a strategic struggle for technological supremacy — one where America is now forced to play catch-up.
