China Halts Rare Earth Exports to U.S., Threatening Supply Chains for Cars, Semiconductors, and Aerospace Industries
China has halted exports of seven critical rare earth elements to the United States, a move that threatens to disrupt supply chains across key American industries, including automotive, semiconductor, and aerospace sectors.
China’s Ministry of Commerce recently added seven rare earth elements—including dysprosium, terbium, and lutetium—to its restricted export list.
These elements are essential for manufacturing high-performance magnets used in electric vehicles, advanced weaponry, and consumer electronics.
NY Times reported:
On April 4, the Chinese government ordered restrictions on the export of six heavy rare earth metals, which are refined entirely in China, as well as rare earth magnets, 90 percent of which are produced in China. The metals, and special magnets made with them, can now be shipped out of China only with special export licenses.
But China has barely started setting up a system for issuing the licenses. That has caused consternation among industry executives that the process could drag on and that current supplies of minerals and products outside of China could run low.
If factories in Detroit and elsewhere run out of powerful rare earth magnets, that could prevent them from assembling cars and other products with electric motors that require these magnets. Companies vary widely in the size of their emergency stockpiles for such contingencies, so the timing of production disruptions is hard to predict.
The so-called heavy rare earth metals covered by the export suspension are used in magnets essential for many kinds of electric motors. These motors are crucial components of electric cars, drones, robots, missiles and spacecraft. Gasoline-powered cars also use electric motors with rare earth magnets for critical tasks like steering.
The metals also go into the chemicals for manufacturing jet engines, lasers, car headlights and certain spark plugs. And these rare metals are vital ingredients in capacitors, which are electrical components of the computer chips that power artificial intelligence servers and smartphones.
This development follows President Trump’s imposition of 145% tariffs on Chinese imports, prompting Beijing to retaliate with its own set of trade barriers, including a 125% tariff on U.S. goods and the current rare earth export restrictions.
The United States is heavily reliant on China for these materials, with China accounting for over 60% of global rare earth production and nearly 90% of processing. This dependency poses a significant risk to national security and economic stability.
Trump’s push for bringing manufacturing back to American soil wasn’t just economic nationalism; it was common sense. His policies aimed to rebuild our industrial base, incentivize domestic production, and secure supply chains. Critics called it protectionism. They were wrong. Relying on a geopolitical rival for essentials is not just risky—it’s suicidal.
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