China has escalated its trade conflict with the US by tightening export controls on seven rare earth minerals in response to tariffs imposed by US President Donald Trump on Chinese goods.
The new measures are expected to impact the global supply chain for materials essential in advanced technology and defence sectors, reported Bloomberg News.
China is the dominant player in the rare earth market, producing nearly 70% of the world’s supply, according to data from the US Geological Survey.
The latest export restrictions are not a complete ban but introduce increased scrutiny over foreign buyers and their intended use of these resources. Historically, such controls have led to significant reductions in export volumes as firms adjust to certification protocols.
Market reactions were swift following the announcement. Shares of China Rare Earth rose up to 10% in Hong Kong, while China Northern Rare Earth Group and Australia’s Lynas Rare Earths experienced gains of 9.2% and 5.1%, respectively.
The restricted list includes samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. Neodymium and praseodymium, more accessible outside China, were excluded, potentially mitigating the impact of future restrictions.
David Abraham from Boise State University pointed out that excluding these elements might preserve options for future controls.
Analysts at Citic Securities commented that the controls could further tighten global supply while aligning with China’s national security objectives and strategic investments in its rare earth industry.
The China Nonferrous Metals Industry Association indicated that trade would remain unaffected for firms that do not compromise China’s national interests. The Ministry of Commerce stated that these measures aim to protect national security and support regional stability and global peace.
Additionally, China has imposed a 34% duty on all US imports, marking a significant escalation in trade relations.
