U.S.-China Relations Affected by Rare Earth Export Controls
The Trump administration is working to ease escalating tensions with China following Beijing’s recent announcement about imposing export controls on rare earth magnets. This prompted the U.S. to respond with threats of increased tariffs on Chinese imports.
Rare earth elements are deemed essential for national security, as they’re utilized in various products—from electric vehicles to consumer electronics, lithium batteries, and even camera lenses. Importantly, they play a crucial role in many weapons systems.
These export controls directly impact the defense supply chain since magnets are integral to platforms like the F-35 fighter jet and Virginia-class submarines, among others.
According to research from the Center for Strategic and International Studies, a Virginia-class submarine contains over 9,200 pounds of rare earth materials, while an F-35 has around 900 pounds. Notably, China is a key player in this market, responsible for mining nearly 60% of the world’s rare earth minerals and processing about 90% as of 2024.
Recently, China expanded its list of controlled exports to include five additional rare earth metals—holmium, erbium, thulium, europium, and ytterbium—along with seven already restricted earlier this year.
Gracelyn Bhaskaran, who leads CSIS’s Critical Minerals Security Program, noted that these new export requirements will compel all foreign companies to seek Chinese approval for exporting magnets that include even trace amounts of these elements or use Chinese technology. She emphasized that starting December 1, 2025, companies connected to foreign military entities, including those of the United States, will likely face denial of most export licenses.
A spokesperson from China’s Ministry of Commerce explained that these restrictions are tied to national security concerns, underscoring the dual-use nature of rare earth elements in both civilian and military applications.
The announcement has stirred up reactions from both Republican and Democratic members of the House Select Committee on Strategic Competition, who are advocating for measures to penalize China. The committee’s chairman, Rep. John Moolener (R-Mich.), characterized the restrictions as an “economic declaration of war,” suggesting that all Americans might bear the consequences.
Moolener criticized China for “threatening” America’s economy by cutting off access to essential minerals that are vital for semiconductor manufacturing, which powers national defense as well as everyday devices like cars and smartphones.
In a letter to President Trump, Moolener urged action to counter China’s influence in the rare earth market, even suggesting restrictions on Chinese airlines accessing U.S. airports until these export controls are lifted.
Rep. Raja Krishnamoorthi (D-Ill.) echoed the sentiment, emphasizing the need for the U.S. to find alternative sources to reduce dependency on China.
In light of these developments, the Trump administration has threatened to impose hefty tariffs—potentially reaching 100%—on Chinese goods while also hinting at the cancellation of a planned meeting with Chinese President Xi Jinping later in October.
Nevertheless, Trump attempted to diffuse the situation over the weekend, stating that it was “the worst possible time” for China to impose these export controls. He expressed confidence, saying, “Don’t worry about China. Everything will be fine.” Trump suggested that President Xi, who he claims doesn’t want a severe economic downturn in his country, may be more inclined to cooperate with the U.S.
In response, the Chinese embassy in the U.S. firmly rejected any new American restrictions and indicated that they would protect their interests as necessary.
Furthermore, U.S. Trade Representative Jamieson Greer mentioned that the U.S. was caught off guard by the announcement of these tightened export controls and highlighted a lack of communication from China regarding the matter.
Despite the heightened tensions, U.S. Treasury Secretary Scott Bessent noted that meaningful discussions occurred over the weekend, maintaining that a meeting between Trump and Xi is still anticipated for October.
