Posted on 04/16/25
| News Source: FOX News
U.S. industry will soon feel the "squeeze" as China halts exports of rare earth minerals – key components in weapons systems, electric vehicles and consumer electronics – in direct retaliation for President Donald Trump’s sweeping 145% tariffs.
Shipments of magnets from China have ground to a halt, the New York Times reported on Sunday, as Beijing tightens export controls in a direct strike on U.S. manufacturing and defense supply chains. While the move is intended to pressure the White House, industry sources say its impact will be global, with exports halted to all foreign buyers, not just the United States.
National Economic Council Director Kevin Hassett acknowledged the growing alarm on Monday, telling reporters at the White House, "Rare earths are a part of lots of the economy. The rare earth limits are being studied very carefully, and they’re concerning, and we’re thinking about all the options right now."
After Trump’s tariff announcement, China hit back with its own 125% tariff on U.S. goods and imposed new export restrictions on seven rare earth materials. Exporters are now holding back shipments as they navigate a potentially lengthy licensing process. Overseas deliveries of magnets – vital for assembling cars, robotics and defense systems – came to a halt on April 4 as the new rules took effect.
China dominates the rare earths market, from mining to processing. (REUTERS/Stringer/File)
The ban doesn’t apply to finished products containing rare earths, potentially undercutting Trump’s tariff strategy. U.S.-made goods that rely on imported materials could face production delays, while goods produced and manufactured in China would still be available for import.
China produces around 60% of the world's critical mineral supply but processes even more, up to 90%.
For years, the U.S. and much of the world enabled China’s dominance in mineral mining and processing, drawn by its lower costs driven by lax environmental rules, cheap labor and heavy government subsidies.
But China’s dominance has also given it enormous leverage: the power to deliver a crippling blow to global industry in the technological age.
"This is a wake-up call now where we don’t have a choice anymore," said Pini Althaus, a mining executive and managing partner at Cove Capital.
The world beyond China is already entering a tungsten supply crisis. The mineral – essential for solar panels, electric vehicles and defense systems – is 80% sourced from China, which imposed export controls in February.
Josh Ballard, CEO of USA Rare Earths, predicted the defense industry would feel the effects first.
"That has to be shipped here and done here in the U.S.," he said.