In a significant escalation of its trade conflict with the United States, China has strategically targeted a critical vulnerability: rare earth metals. These elements are essential in the manufacturing of a wide range of advanced technologies, including military equipment, and now sit at the heart of an intensifying standoff between these two major economic powers.

On April 10, 2025, China implemented a hefty 34% tariff on all American goods imported into its territory, marking a direct response to tariffs enacted by the U.S. government just a day prior. This decisive move underscores Beijing’s willingness to leverage its dominant position in the rare earth sector as a tool for geopolitical pressure, highlighting the intertwined nature of trade and international relations.

Understanding Rare Earth Metals: A Strategic Leverage Point

Rare earth metals comprise a group of 17 chemical elements that are vital for the production of advanced technologies such as smartphones, electric vehicles, renewable energy sources like wind turbines and solar panels, as well as military applications like missiles and satellites. Notably, China produces approximately 90% of the world’s supply of these critical materials, controlling both the extraction and industrial processing stages. This substantial dominance allows China to exert significant influence over global markets, particularly concerning countries that heavily rely on these materials for both their technological and defense sectors.

In the past few years, Beijing has frequently employed export controls on rare earths as a means to exert pressure on the United States and its allies. For instance, on April 4, 2025, China announced a series of retaliatory measures against tariffs initiated by President Donald Trump, which included restrictions on the export of seven rare earth elements that are crucial for U.S. defense, energy, and automotive industries. These elements include samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

Partial Easing of Export Restrictions Amid Ongoing Controls

In a somewhat conciliatory gesture, following trade negotiations in Geneva, China temporarily lifted export controls on 28 American companies for 90 days. This development was reported after a bilateral meeting between U.S. Secretary of the Treasury Scott Bessent and Chinese Vice Premier He Lifeng on May 11, 2025. The easing of restrictions allowed certain dual-use export controls to be suspended and removed 17 companies from China’s “unreliable entity list,” enabling them to resume imports, exports, and investments within the country.

Despite this temporary reprieve, China continues to maintain a blockade on the export of the seven critical rare earth elements to the United States. During a recent press conference, the Chinese Ministry of Commerce refrained from elaborating on these restrictions, sticking to a firm position regarding the management of these strategic materials. The ministry reiterated the importance of “comprehensive control of strategic minerals” in the context of national security, further underscoring how rare earths are becoming a pivotal geopolitical tool.

Historical Context and Strategic Risks

The utilization of rare earth export controls by China is not a novel strategy. In 2010, Beijing’s imposition of restrictions prompted the United States and other nations to actively seek alternative suppliers and innovate new technologies, marking a critical strategic shift in the sourcing of rare earths globally. Nevertheless, the U.S. continues to remain highly dependent on China’s processing capabilities, with domestic production infrastructure struggling to catch up.

This ongoing reliance creates a double-edged sword for China. On one hand, the aggressive use of export controls can deter U.S. industries from solely depending on Chinese rare earths, possibly prompting them to diversify their sources in the long run. Conversely, such moves could risk diminishing China’s significant influence over these crucial materials. The latest measures confirmed that the conflict between the United States and China extends far beyond mere tariffs, representing a broader competition for technological supremacy.

An Invisible Front in the New Cold War

Media outlets in China, including a social media account affiliated with the national broadcaster CCTV, have underscored the critical role that rare earth metals play in bolstering U.S. defense capabilities. A notable post highlighted that American defense industries are currently being “strangled by rare earth shortages,” raising essential questions about potential shifts in the United States' weaponry and equipment production.

This evolving scenario illustrates how rare earth metals have transformed into a significant battleground in the ongoing trade and technological rivalry between Beijing and Washington. The rare earth sector represents a vital point of vulnerability for the U.S., and signals indicate that China is determined to exploit this leverage in their geopolitical contest.