Trade war context – What’s being suspended?
As tensions rise in the US-China trade war, China has halted the export of key rare earth elements, metals, and magnets — posing a serious threat to Western access to essential components used in weapons, electronics, automobiles, aerospace, semiconductors, and various consumer products.
The Chinese government is developing a new export regulation framework, in which shipments of magnets — crucial for producing everything from cars to missiles — have been suspended at several Chinese ports. Once it’s implemented, it may permanently block certain companies, including US military contractors, from receiving these supplies.
Why Rare Metals Matter to the US?
China’s restricted heavy rare earth metals are essential for magnets in electric motors used in vehicles, drones, robots, missiles, spacecraft, and gasoline-powered cars. On 02 April, China imposed restrictions on seven key rare earths—including samarium, gadolinium, terbium, and yttrium — in retaliation to the U.S. raising tariffs on Chinese goods to 54 percent. As the leading global producer — about 90 percent of rare earths, American industries remain heavily dependent on Chinese imports for both raw materials and finished products — further straining trade relations.
A Calculated Move to Assert Control:
This move highlights China’s strategic use of dominance in rare earth mining and processing as a geopolitical tool. Beijing can limit exports by controlling export licenses, having already banned three metals from the US and imposed strict controls on others.
US companies like Lockheed Martin, Tesla, and Apple rely on Chinese rare earths, and while the US has reserves, they are inadequate for long-term defined needs. China’s undeveloped export licensing system for rare earth metals and magnets is raising concerns about global supply shortages.
Disclaimer: This article has references to expert opinions and open sources, including the NDTV, the New York Times, and Reuters.