China hits back at US tariffs with export controls on key rare earths

BEIJING/LONDON - China placed export restrictions on rare earth elements on April 4 as part of its sweeping response to US President Donald Trump’s tariffs, squeezing supply to the West of minerals used to make weapons, electronics and a range of consumer goods.

The move, which Beijing had long hinted was possible, further ratchets up trade tensions between the world’s two largest economies and leaves American manufacturers scrambling for fresh supplies of the critical minerals they have relied upon for decades.

China produces around 90 per cent of the world’s rare earths, a group of 17 elements used across the defense, electric vehicle, energy and electronics industries. The United States has only one rare earths mine and most of its supply comes from China.

Beijing announced the controls late on April 4 as part of a broader package of tariffs and company restrictions in retaliation for Mr Trump’s decision to hike tariffs against most Chinese products to 54 per cent.

The export curbs include not only mined minerals but permanent magnets and other finished products that will be difficult to replace, analysts said.

The move, which affects exports to all countries, not just the US, is the latest demonstration of China’s ability to weaponise its dominance over the mining and processing of the critical minerals.

Seven categories of medium and heavy rare earths, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium-related items, will be placed on an export control list as of April 4, according to a Ministry of Commerce release.

Lockheed Martin, Tesla and Apple are among the US companies that use Chinese rare earths in their supply chains.

“China made that list strategically,” said Mr Mel Sanderson, a director at American Rare Earths, which is building a Wyoming rare earths mine it hopes to open by 2029,