China’s latest move to tighten control over rare earth exports has reignited trade tensions with the United States, threatening to upend months of fragile calm between the world’s two largest economies.
The announcement, published last week by China’s Ministry of Commerce as “Document No. 62 of 2025,” introduces sweeping new restrictions on the export of rare earth materials. Under the new rules, foreign firms must now obtain government approval to export products containing even small amounts of rare earths and must declare their intended use.
The measure strengthens Beijing’s grip on a market where it already holds near-monopoly control over the processing of rare earth minerals—essential components for products ranging from smartphones and electric vehicles to fighter jets and missile systems.
The United States swiftly responded, with President Donald Trump threatening a 100% tariff on Chinese goods and new export restrictions on critical software. “This is China versus the world,” said US Treasury Secretary Scott Bessent. “They have pointed a bazooka at the supply chains and industrial base of the entire free world.”
Beijing, however, rejected accusations of economic coercion, saying that compliant export licence applications intended for civilian use “will be approved.” China also criticised Washington for “deliberately provoking misunderstanding and panic.”
The escalation comes just weeks before Trump and Chinese President Xi Jinping are expected to meet, casting a shadow over upcoming negotiations. Analysts say the timing gives Beijing a strategic edge. “China’s new controls will shock the system,” said Naoise McDonagh, an international business lecturer at Edith Cowan University. “They’ve targeted America’s weakest link—its dependence on Chinese supply chains.”
Rare earth elements are crucial for clean energy and defence technologies. An F-35 fighter jet, for instance, requires more than 400 kilograms of rare earths for components including motors and radar systems. China currently supplies about 70% of the world’s magnet metals used in electric vehicle motors.
Experts say Beijing’s dominance stems from decades of investment in research, technology, and processing infrastructure, far ahead of Western competitors. While countries such as Australia and the US are ramping up efforts to develop alternative sources, analysts estimate it will take at least five years to catch up.
Despite the 30% decline in China’s rare earth exports in September, economists say the impact on its $18.7 trillion economy will be negligible. “The strategic value of rare earths far outweighs their economic value,” said Professor Sophia Kalantzakos of New York University.
As both sides brace for high-stakes talks later this month, analysts believe Beijing’s move is a calculated show of strength. “If China cuts off rare earth supplies, that can stop industries worldwide,” said Professor McDonagh. “That’s the leverage Beijing knows it has.”
