China Halts Key Metal Exports Amid US Trade Tensions

As US-China trade war worsens, China stops exporting key rare earth metals and magnets. These exports are vital for weapons, electronics, cars, aerospace, and semiconductor industries in the West. China is working on a new regulatory framework for controlling exports of critical materials. Meanwhile, magnet shipments have been suspended at multiple Chinese ports. These magnets are crucial for manufacturing various products, from automobiles to military missiles.

As per the report, once the new regulatory system is in place, it could permanently prevent supplies from reaching certain companies, including American military contractors.

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US Dependency On Imports from China

Beijing’s export crackdown is a response to US President Trump’s harsh trade policies. China supplies nearly 90% of global rare earth elements, crucial for defense and tech industries. Seven rare earth types, like samarium and dysprosium, are now on China’s export control list. The US has only one rare earth mine and heavily depends on Chinese imports.

On April 2, China restricted rare earth exports as part of wider tariffs against US trade actions. The restrictions include raw minerals, magnets, and finished products vital to global manufacturing. Analysts say replacing these products will be tough for foreign companies. The move escalates trade tensions and pushes US firms to seek new rare earth sources. Rare earths and magnets now need special export licenses to leave China. China’s export license system is still undeveloped, worrying global industries about future supply delays.

A Move To Exert Dominance

China’s move impacts exports to all countries, not just the US, and shows its ability to weaponize control over critical minerals. While not a full export ban, Beijing can still restrict shipments by limiting the number of export licenses issued. US companies like Lockheed Martin, Tesla, and Apple use Chinese rare earths in their supply chains. The US does have some stockpiles of rare earths, but not enough to support its defense contractors long-term. China has already imposed full bans on exports of three metals to the US and placed controls on many others. Restrictions on heavy rare earth elements are especially significant, as China holds even tighter control over them. According to David Merriman from consultancy Project Blue, there is only one heavy rare earth operation outside China—in Myanmar and Laos—where China also plays a major role in supply chains.

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Why Rare Metals Are Important For The US

The heavy rare earth metals put under export suspension by China are used in magnets– essential for many kinds of electric motors used in the manufacturing of electric cars, drones, robots, missiles and spacecraft and gasoline-powered cars. 

These metals are required for the manufacturing of jet engines, lasers, car headlights and certain spark plugs and capacitors, which are electrical components of the computer chips that power artificial intelligence servers and smartphones.