As a retaliatory measure against Trump’s tariff increases, the Chinese Communist Party (CCP) suspended the exports of seven key rare earth materials and magnets starting from April 4th.
World’s richest person, Elon Musk, responded on April 15th by saying that Beijing’s halt on rare earth exports is “actually meaningless” because rare earths are ubiquitous. Musk pointed out on X platform that people often mistakenly believe that rare earth deposits are scarce resources, when in fact, they are plentiful everywhere.
Musk revealed the crux of the issue: the actual problem lies not in acquiring rare earths, but in how to refine rare earth elements and possessing the ability to manufacture magnets for electric motors. The CCP’s advantage lies in its large-scale heavy industrial extraction of minerals, which is currently a weakness in the Western supply chain.
According to Reuters’ analysis, Beijing’s halt on rare earth exports in the tariff war shows that it has weaponized control over rare earths.
Rare earths are widely used in jet engines, lasers, capacitors, with capacitors being crucial components of AI servers and smartphone chips. Rare earth magnets are used in the manufacturing of cars, drones, robots, and missiles. China dominates the global rare earth refining sector, accounting for 90% of rare earth magnet production globally.
The Trump administration has initiated new countermeasures. According to sources cited by the Financial Times on April 12th, Trump will permit the accumulation of a large amount of metal resources on the Pacific seabed and add them to the existing federal metallic strategic reserves to counterbalance the CCP’s dominant position in battery minerals and rare earth supply chains.
Other measures include expediting the approval process for deep-sea mining applications and establishing and enhancing onshore processing capabilities for “polymetallic nodules.” Polymetallic nodules, seabed mineral resources comparable in size to potatoes, are believed to be the most widely distributed and largest reserves of metal resources on the seabed.
In reality, the CCP did not just recently begin using critical minerals as weapons in retaliation against the U.S. After the escalation of the U.S.-China chip war in 2024, the CCP announced in early December of last year a complete ban on the export of gallium, germanium, and antimony to the U.S., following export restrictions imposed in July 2023 on indium and gallium compounds, in October 2023 on graphite, and in August 2024 on metals such as antimony.
【Source: New Tang Dynasty News】