China Halts Rare Earth Exports in Response to U.S. Tariffs

Supplies of samarium, gadolinium, and yttrium restricted. U.S. auto, microelectronics, and defense sectors at risk.

Apr 15, 2025 - 14:23
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China Halts Rare Earth Exports in Response to U.S. Tariffs
Photo taken from public sources

Beijing has announced the suspension of exports of several key rare earth elements, including samarium, gadolinium, yttrium, and others vital for high-tech manufacturing — from electric vehicles and semiconductors to drones and missiles. The new restrictions also apply to the export of finished magnets based on these metals.

The decision was made in response to actions by the administration of Donald Trump, which imposed tariffs of up to 54% on a broad range of Chinese goods. Beijing explained the introduction of export licensing for strategic materials as a necessity for "national control and technological security," though Western analysts view it as a direct economic countermeasure.

Preliminary data indicates that Chinese authorities have implemented new export approval procedures that have effectively suspended deliveries to many foreign clients. This particularly affects U.S. military contractors and high-tech companies now facing the risk of a shortage of critical components.

Experts note that China controls about 70% of the global rare earth market, and over 90% in certain categories. Export restrictions pose direct risks to global supply chains, especially in the sectors of green energy, defense, microelectronics, and automotive manufacturing. The most vulnerable are electric vehicle production, satellite systems, and high-precision aerospace technology.

The threat of disrupted rare earth supplies has already caused concern in financial markets. Shares of companies dependent on these imports have fallen, while Chinese firms specializing in rare earth mining and processing have seen their stock prices rise.

China has previously used similar tactics — in 2010, it restricted shipments to Japan during a territorial dispute. This latest move is seen as an escalation of economic confrontation with the U.S. and may mark the start of a new phase of trade war centered on strategic resources.

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