US-China Trade War Reignites Over Rare Earths

News Desk

Islamabad: Trade tensions between the United States and China have reignited after President Donald Trump announced a sweeping 100 percent tariff on Chinese imports and unveiled new export controls on sensitive technologies, prompting a sharp response from Beijing, which tightened restrictions on rare-earth metal exports.

In a social media post on Friday, Trump said the measures—set to take effect next month—aimed to safeguard America’s “economic and national security interests.”

“Some very strange things are happening in China! They are becoming very hostile,” Trump wrote, accusing Beijing of attempting to “hold the world captive.”

Markets Rattle as Trump Threatens Xi Meeting

The announcement sent shockwaves through global financial markets. The S&P 500 index fell 2.7 percent, marking its steepest drop since April, while Asian markets also slipped amid fears of a renewed trade war.

Trump hinted that he might cancel a scheduled meeting with Chinese President Xi Jinping, though later clarified that he still plans to attend the summit.

The move represents a dramatic reversal from the trade détente both nations reached in May, when they agreed to ease triple-digit tariffs that had nearly frozen bilateral commerce.

Beijing Tightens Rare-Earth Export Controls

Just hours before Trump’s announcement, China’s Ministry of Commerce issued “Announcement No. 61 of 2025,” expanding export controls on five additional rare-earth elements—holmium, erbium, thulium, europium, and ytterbium.

The new restrictions, effective December 1, bring the total number of controlled rare-earth metals to 12 out of 17. China also imposed new limits on the export of specialized refining equipment critical to rare-earth processing.

A ministry spokesperson said the measures were driven by national security concerns, emphasizing that foreign entities had allegedly used Chinese materials for unauthorized military applications.

“Rare-earth-related items have dual-use properties for both civilian and military applications,” the spokesperson stated. “Implementing export controls on them is an international practice.”

Under the new rules, foreign companies must obtain approval from Beijing before exporting magnets or semiconductor materials containing even 0.1 percent heavy rare-earth content.

Strategic Stakes and Global Risks

Rare-earth elements are vital to modern technologies—from electric vehicles and smartphones to fighter jets, missiles, and radar systems. According to the Center for Strategic and International Studies (CSIS), China mines about 60 percent and processes nearly 90 percent of the world’s supply.

Experts warn that Beijing’s move could disrupt global manufacturing and grant China renewed leverage in its ongoing strategic rivalry with Washington.