Beijing: Just when we thought the Trump tariff wars had subsided, Donald Trump reignited the fire with a 100% tariff on Chinese goods after China made it harder to import rare earth minerals from the country. While Trump’s tariff trump card hasn’t worked as he expected, the world’s dependence on China’s capabilities to mine and process rare earths has earned it the real trump card.
According to Beijing’s new rule, foreign entities will need a license to export any rare earth minerals from China, both domestically-sourced or manufactured or refined, from the Chinese Ministry of Commerce. This adds to the compliance requirements for sourcing rare earths from China, which even includes components of refining technology. The new rules will come into effect on December 1, 2025.
After the news of this rule broke, Donald Trump chided Beijing for its increasingly tough stand on rare earth supplies, with this post on Truth Social.
“It has just been learned that China has taken an extraordinarily aggressive position on Trade in sending an extremely hostile letter to the World, stating that they were going to, effective November 1st, 2025, impose large scale Export Controls on virtually every product they make, and some not even made by them. This affects ALL Countries, without exception, and was obviously a plan devised by them years ago. It is absolutely unheard of in International Trade, and a moral disgrace in dealing with other Nations,”
China currently controls over 70% of the total production for rare earths- minerals that are crucial to manufacture semiconductors, wind turbines, missile systems and electric vehicles. This development could disrupt the global supply chains, affecting the production of crucial equipment across the world, while driving costs higher and contributing to higher inflation.
According to Reuters, the move was in response to US lawmakers’ calls to ban exports of chipmaking equipment to China.
China has been using its supply dominance in rare earths as its biggest ace in the tariff wars between the two superpowers. It has forced highly restrictive terms on importers for the use of its rare earths, especially since the US tries to restrict China from the semiconductor supply chain.
Also Read: PM Narendra Modi warns against weaponisation of rare earths in subtle swipe at China
From India, China has demanded assurances through end-user certificates that the rare earths provided are used only for domestic purposes, and not for re-export. They also want assurances that the rare earths aren’t resold to the US or used for sensitive applications, including for ‘dual-use’ semiconductor and defence equipment.
China has been using its dominant position in rare earths for quite some time now, using an ‘off’ or ‘on’ switch to earn political leverage. For manufacturers in India’s booming manufacturing sector, supply chain disruptions could be devastating, with original equipment manufacturers scrambling to develop non-rare-earth alternatives to hedge against them.
