China’s Ministry of Commerce last week released “Announcement No. 62 of 2025”, imposing strict new regulations on rare earth exports. The move marks a significant escalation in the ongoing US-China trade tensions and highlights China’s leverage over global supply chains of critical minerals.

What the Announcement Entails

• Foreign companies now require government approval to export products containing even minimal amounts of rare earths.
• Companies must declare the intended use of these products.
• The controls apply to a wide range of industries, from consumer electronics to military equipment.

Rare earth minerals are essential for modern technology, including smartphones, electric vehicles, solar panels, and fighter jets. For example, an F-35 fighter jet requires over 400 kg of rare earths for its stealth coatings, motors, and radars.

China dominates the processing of rare earths, supplying roughly 70% of the global demand for metals used in EV motors. The country has cultivated a vast talent pool and advanced research networks in this field, giving it a near-monopoly that competitors struggle to match.

Global Response

• US President Donald Trump threatened to impose a 100% tariff on Chinese goods and introduce export controls on key software in retaliation.
• US Treasury Secretary Scott Bessent stated:

“This is China versus the world. They have pointed a bazooka at the supply chains and the industrial base of the entire free world, and we're not going to have it.”

• China responded by accusing the US of provoking unnecessary panic, adding that export licenses for compliant civilian use would be approved.

Both countries also imposed new port fees on each other’s ships, further straining relations. The announcement effectively ends months of relative calm after a truce was brokered in May and sets the stage for the upcoming Trump-Xi meeting later this month.

Implications

Experts warn that the restrictions could shock global supply chains, especially for the US and its allies. Alternative sources of rare earths, such as Australia, exist but currently lack the infrastructure for cost-effective processing. Analysts estimate it could take at least five years for other nations to catch up with China’s processing capabilities.

The timing of these measures also complicates negotiations, giving Beijing a clear strategic advantage in trade talks, particularly as the US seeks to reduce reliance on Chinese critical minerals.

This summary captures the essentials of China’s rare earth export curbs, the geopolitical implications, and the challenges facing the US and other nations in responding to Beijing’s near-monopoly.