The trade war between the United States and China continues to escalate, with the two sides engaging in fierce competition in critical mineral resources. China recently announced export restrictions on rare earth metals and rare earth magnets, causing a global supply chain shock. Chinese officials described the control of rare earths in China as a direct hit on the United States’ “Achilles’ heel,” potentially affecting the production of the U.S. sixth-generation fighter jets.
However, experts point out that the United States had already developed alternative strategies since the beginning of the Trump administration, which have shown initial effectiveness in replacing China’s rare earth supply chain. Therefore, China’s move to restrict rare earth exports may be more symbolic than impactful.
The Chinese Ministry of Commerce, together with the General Administration of Customs, announced on April 4th the implementation of export controls on seven categories of medium and heavy rare earth-related items.
The Chinese state-run newspaper, “Daguangbao,” described China’s precise counterattack in restricting rare earth exports as “striking at the heart of the U.S. military industry.” Official comments also suggested that a cutoff of Chinese rare earths could lead to uncertainties in the production of the U.S. F-47 sixth-generation fighter jet.
Analyst Wang He stated to Dajiyuan that the Chinese prohibition on rare earth exports may have a certain impact on the U.S. economy in the short term but is unlikely to be a fatal blow. China had previously used rare earths as leverage against Japan, but Japan successfully mitigated the effects of China’s export restrictions.
Su Ziyun, Director of the Strategic and Resources Department at the Taiwan Institute for National Defense and Security Studies, mentioned that after the Diaoyu Islands incident in 2010, China began controlling rare earth exports. Democratic countries like Japan and the United States started seeking alternative solutions, including restarting their existing rare earth stockpiles, developing new rare earth mines, and recycling rare earths from discarded electronic products.
Rare earth elements are widely used in industries such as defense, electric vehicles, clean energy, and electronics. While rare earths are not scarce worldwide, China produces the majority of refined rare earth minerals globally.
According to Reuters analysis, Beijing’s decision to halt rare earth exports in the U.S.-China trade war demonstrates the weaponization of rare earth control as a strategic tool by China.
In response to China’s restrictions on rare earths, U.S. President Trump swiftly took action. On Tuesday, April 15th, he signed an executive order initiating a national security investigation into the import of critical minerals and their derivatives to assess whether U.S. dependence constitutes a strategic risk.
In fact, China had already used critical minerals as retaliation against the United States before the current trade war erupted.
In July 2023, China announced export restrictions on indium, germanium, and their compounds; in October 2023, it imposed export restrictions on graphite; and after the escalation of the U.S.-China chip war, China announced in early December 2024 a complete ban on exporting indium, germanium, and antimony to the United States.
China’s control over rare earth exports has raised concerns among Western countries. U.S. researchers are actively analyzing global mineral deposits to assess progress in diversifying rare earth supplies outside of China.
Apart from seeking critical mineral agreements with Ukraine, the U.S. government has announced measures to increase domestic production. Furthermore, the U.S. is also seeking to curb Chinese control over critical minerals in Greenland.
Director Su Ziyun from the Taiwan Institute for National Defense and Security Studies mentioned that after China initiated the rare earth battle, the U.S. government included rare earth issues in the defense industry security report, and since the Trump administration, alternative strategies to replace China’s rare earth supply chain have shown preliminary effectiveness. The move by China may not have a significant impact, only highlighting its symbolic significance.
Notably, Trump plans to utilize emergency powers under the Defense Production Act to launch a deep-sea metal resource reserve program.
According to the Financial Times, citing insider sources, Trump will allow the substantial “hoarding” of metal resources on the Pacific seabed to be added to the existing federal strategic metal reserves, countering China’s dominant position in battery minerals and rare earth supply chains.
Other measures include expediting deep-sea mining application approvals and establishing and enhancing onshore processing capabilities for “polymetallic nodules.” Polymetallic nodules are seabed mineral resources, comparable in size to potatoes, and are considered to be the most widely distributed and largest metal resources on the ocean floor.
World’s richest man, Elon Musk, expressed on April 15th on Platform X that Beijing’s halt on rare earth exports is “actually meaningless” because rare earths are ubiquitous. He pointed out that when people hear about rare earths, they tend to assume these resources are scarce, which is a misconception as they are actually found everywhere.
Commentator Wang He stated, “In the ongoing U.S.-China trade war, China’s retaliatory measures, especially in rare earths and related industries, will have a significant impact and stimulate faster and stronger U.S. actions to counter China.”