China Tightens Grip on Rare Earth Exports, Challenging Trump Administration

Mon Oct 20 2025 20:50:35 GMT+0300 (Eastern European Summer Time)

In a significant move, China implements strict new regulations on rare earth exports, intensifying trade tensions with the United States as Donald Trump vows retaliation.

China's recent announcement of stringent curbs on rare earth exports marks a pivotal escalation in ongoing trade disputes with the U.S. This move highlights China's dominance in the critical minerals market, essential for various technologies, and signals its leverage in the trade war. The U.S., facing a potential supply crisis, considers counteractions, setting the stage for contentious negotiations between Trump and Xi Jinping.

Last week, China's Ministry of Commerce published a document that went by the name of announcement No. 62 of 2025.

This wasn't just any bureaucratic missive. It has rocked the fragile tariffs truce with the US.

The announcement detailed sweeping new curbs on its rare earth exports, in a move that tightens Beijing's grip on the global supply of the critical minerals - and reminded Donald Trump just how much leverage China holds in the trade war.

China has a near-monopoly in the processing of rare earths - crucial for the production of everything from smartphones to fighter jets.

Under the new rules, foreign companies now need the Chinese government's approval to export products that contain even a tiny amount of rare earths and must declare their intended use.

In response, US President Donald Trump threatened to impose an additional 100% tariff on Chinese goods and put export controls on key software.

This is China versus the world. They have pointed a bazooka at the supply chains and the industrial base of the entire free world, and we're not going to have it, said US Treasury Secretary Scott Bessent.

On Thursday, China said the US had deliberately provoked unnecessary misunderstanding and panic over the rare earths restrictions.

Provided the export licence applications are compliant and intended for civilian use, they will be approved, a commerce ministry spokesperson added.

This week, the world's two biggest economies also imposed new port fees on each other's ships.

The flare-up in the trade war brings to an end months of relative calm after top US and Chinese officials brokered a truce in May.

Later this month, Trump and China's President Xi Jinping are expected to meet and experts have told the BBC the rare earths restrictions will give China the upper hand.

China's new controls are bound to shock the system as they target vulnerabilities in American supply chains, said international business lecturer Naoise McDonagh from Australia's Edith Cowan University.

The timing has really upset the kind of timeline for negotiations that the Americans wanted.

Rare earth minerals are essential for the production of a whole range of technology such as solar panels, electric cars and military equipment.

A single F-35 fighter jet is estimated to need over 400kg of rare earths for its stealth coatings, motors, radars and other components.

China's rare earth exports account for around 70% of the world's supply of metals used for magnets in electric vehicle motors.

Despite accusations of betrayal, Bessent has left the door open to negotiations, stating, I believe China is open to discussion and I am optimistic this can be de-escalated.

The implications of China's latest actions in the realm of rare earth exports continue to unfold, signaling a critical moment in the evolving landscape of international trade.

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