In a strategic blow to the United States, China has imposed strict export controls on seven key rare earth elements—vital materials powering smartphones, electric vehicles, and defense systems. The move follows former U.S. President Donald Trump’s 34% tariffs on Chinese imports, reigniting a trade war with high-tech implications. While the U.S. introduced retaliatory measures and launched a probe into critical mineral imports, it lacks short-term leverage: China controls 92% of global rare earth processing and 61% of mined output.
Rare earth shipments to several U.S. and European companies have already been halted, causing confusion and disruption. These elements, especially heavy rare earths now under Beijing’s licensing regime, are crucial to American industry yet sparsely available outside China. Despite efforts to reshore production, including a Texas magnet plant and a zero-waste processing facility in Massachusetts, the U.S. supply chain is years from self-reliance.
Experts say China’s move showcases its unmatched economic leverage. As U.S. companies scramble to scale up domestic output, China’s dominance—built over decades of investment and subsidies—remains unshaken. With supply chains disrupted and industries rattled, the battle for rare earths is becoming the defining front of the new tech Cold War.
