After President Donald Trump unveiled his so-called reciprocal tariffs on “Liberation Day,” China retaliated with its own duties and export controls on rare earth minerals, which are critical to the tech, auto, aerospace, and defense sectors. So far, those export controls have translated to a halt across the board, cutting off the U.S. and other countries, according to the New York Times.
China is exploiting a highly lopsided advantage it has in global trade as it hits back against President Donald Trump’s tariffs: rare earths. After Trump unveiled his “Liberation Day” tariffs on April 2, China retaliated on April 4 with its own duties as well as export controls on several rare earth minerals and magnets made from them. So far, those export controls have translated to a halt across the board, cutting off the U.S. and other countries, according to the New York Times. That’s because any exports of the minerals and magnets now require special licenses, but Beijing has yet to fully establish a system for issuing them, the report said. In the meantime, shipments of rare earths have been halted at many ports, with customs officials blocking exports to any country, including to the U.S. as well as Japan and Germany, sources told the Times. China’s Ministry of Commerce issued export restrictions alongside the General Administration of Customs, prohibiting Chinese businesses from any engagement with U.S. firms, especially defense contractors.
While the Trump administration unveiled tariff exemptions on a range of key tech imports late Friday night, China’s magnet exports were still halted through the weekend, industry sources told the Times. Beijing’s export halt is notable because China has a stranglehold on global supplies of rare earths and magnets derived from them. They also represent an asymmetric advantage in that rare earths constitute a small share of China’s exports but have an outsize impact on trade partners like the U.S., which relies on them as critical inputs for the auto, chip, aerospace, and defense industries. China’s U.S. embassy did not immediately respond to a request for comment. National Economic Council Director Kevin Hassett addressed the situation on Monday, acknowledging concern and saying, “Rare earths are a part of lots of the economy.” “The rare earth limits are being studied very carefully, and they’re concerning, and we’re thinking about all the options right now,” he told reporters outside the White House.
China’s export restrictions also put Trump’s attempts to gain control of Greenland in a fresh light. The self-governing Danish island possesses one of the world’s largest known rare earth deposits. Vice President JD Vance visited Greenland earlier this month, despite repeated pushback from Denmark against U.S. rhetoric. “We need Greenland for national security and even international security, and we’re working with everybody involved to try and get it,” Trump said in an address to Congress last month. Meanwhile, Trump has also been pursuing a deal with Ukraine to develop rare earth supplies. He said in February he wanted “the equivalent of, like, $500 billion worth of rare earths.” Those talks are ongoing. Last month, Trump signed an executive order that directed federal agencies to identify mines and government-owned land that could help increase rare earth production. The Trump administration is also drafting another executive order to clear the way for stockpiling deep-sea metals to offset China’s control of rare earth supply chains, sources told the Financial Times.
