Fri, 17 Oct 2025

Fri, 17 Oct 2025 China has found Trump's pain point - rare earths

China holds a near-monopoly in the processing of the elements crucial for making everything from smartphones to fighter jets.
China's Ministry of Commerce has published an announcement that has sparked tensions with the US. The document, "announcement No. 62 of 2025", introduces new restrictions on the export of rare earth minerals. These minerals are crucial for the production of various technologies, including smartphones and fighter jets. Under the new rules, foreign companies need to obtain approval from the Chinese government to export products containing even small amounts of rare earths and must declare their intended use. The US has responded by threatening to impose an additional 100% tariff on Chinese goods and put export controls on key software. The move has been criticized by the US Treasury Secretary Scott Bessent, who stated that China has "pointed a bazooka at the supply chains and the industrial base of the entire free world". A Commerce Ministry spokesperson defended the restrictions, saying that they will be approved for civilian use. China's rare earth exports account for around 70% of the world's supply of metals used in electric vehicle motors. The US and other countries are investing heavily to develop alternatives to China for supplies of rare earths, but it is likely to take several years to catch up with China. Analysts say that China's economy is unlikely to be significantly impacted by the drop in exports, as rare earths make up a very small part of China's annual GDP. However, the restrictions have significant strategic value for Beijing, giving them more leverage in talks with the US. The tensions between the two countries come ahead of a meeting between Trump and China's President Xi Jinping later this month. Experts say that China has found its "best immediate lever" to pressure Washington for a favourable deal by curbing rare earth exports.
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