China responded to US tariffs by targeting one of its weak points: rare earths
Trade tensions just got a major bump as China shifts its focus to the rare earths market—a sector where Western nations are pretty exposed. This isn’t your run-of-the-mill trade disagreement between the United States and China; it’s a whole new ballgame. Rare earth elements are vital for modern tech and industry (think smartphones, electric cars, and more), so this move is bound to shake up global markets and tech progress.
China’s bold moves
China’s rolling out a series of tough steps to push back against US tariffs. Starting on April 10, they’re slapping a hefty 34% tax on all American imports. This comes as a direct retort to tariffs that kicked in on April 9 under former President Donald Trump. On top of that, Beijing has canceled import licenses for six specific American companies, adding more fuel to the economic fire.
They’re not stopping there. China has tightened export controls on some rare earth elements and had already clamped down on rare earth technology exports on December 21, 2023. Then, in early December 2024, they banned shipments of key minerals like gallium, germanium, and antimony to the United States (minerals that many high-tech and industrial processes rely on). These moves show just how ready China is to use its near-monopoly in rare earths as a bargaining chip against Western economies.
The US fights back
In reaction to China’s tough stance, the United States, under President Trump, hit back with tariffs on a range of Chinese products—making it clear they’re not taking this lying down. Aware of how much they depend on Chinese rare earths, the US and its allies are hustling to find other suppliers. They’re also working on boosting domestic production that might eventually cut ties with China’s rare earth supply chain, all while engaging in trade negotiations with other key nations.
That said, setting up extraction and processing facilities at home isn’t a walk in the park—it’s both pricey and slow to build. Still, these efforts show a long-term plan to reduce China’s grip on this key industry.
The key role of rare earths
Rare earth elements are a set of 17 distinct elements used to manufacture a slew of modern tech, from smartphones and batteries to wind turbines, solar panels, electric vehicles, satellites, missiles, and electronic chips. They’re at the heart of both everyday tech and military hardware.
With China controlling about 90% of global rare earth production, they hold a lot of sway over international markets. This dominance lets them call the shots for countries that rely heavily on these materials for their tech and industrial growth.
Risks and what this means
This standoff has shades of a new tech rivalry between superpowers. Because rare earths are a big vulnerability for the US, any hiccup in their supply could really mess with industries that depend on them. In the short run, the US and its buddies have a hard time since they don’t have enough refining facilities outside of China, but there’s hope that long-term strategies might chip away at China’s monopoly.
Just look back at 2010—when China’s restrictions pushed many nations to look for alternatives. This trend seems set to continue as countries work on diversifying their sources of these important elements.
This showdown over rare earths highlights the broader tensions between two major powers battling for tech leadership. As both sides work through this tricky situation—where economics and security worries mix—the rest of the world is left figuring out how best to cope with a rapidly changing global supply chain landscape. How things play out now is sure to shape future ties between big players in industries that depend on these indispensable resources, underscoring just how intertwined everything is today.