In a sharp escalation of trade tensions with the United States, China has halted exports of key minerals and rare earth magnets, threatening to disrupt global supply chains for electric vehicles, semiconductors, and military technology. This move is part of Beijing’s retaliation against new tariffs imposed by US President Donald Trump earlier this month.
Chinese customs officials have blocked shipments of six heavy rare earth elements and associated magnets from ports across the country. Exporters are now required to apply for special licenses, though China has yet to finalize a system for granting these permits, raising concerns about long-term disruptions for manufacturers who depend on Chinese resources.
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Rare earth magnets, which are crucial for electric motors in cars, drones, and military systems, have been hit hardest by the export freeze. China dominates the production of these magnets, accounting for over 90% of global supply. This has led to fears of severe consequences for industries reliant on these materials, especially in the US.
While some ports are still allowing exports with minimal amounts of heavy rare earth content, they are withholding shipments destined for the United States. This has left US defense contractors, in particular, deeply concerned. MP Materials, the only operational rare earth mine in the US, is closely watching the situation as delays in licensing could create further strain on global inventories.
This move by China mirrors a brief rare earth embargo in 2010, when Japan faced similar trade restrictions. However, the impact today may be more significant, with rare earth magnets playing a critical role in industries spanning from defense to renewable energy. As geopolitical tensions intensify, the halt in exports underscores the growing importance of strategic materials in both energy transition efforts and national security.
