CaliToday (13/10/2025): Beijing’s latest export controls on rare earth minerals are not just another move in the ongoing trade war; they represent a strategic power play that could effectively lock nations out of the global technology ecosystem, a former White House advisor has warned.
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| President Xi Jinping at the Chinese People’s Political Consultative Conference in Beijing on March 10. |
On Thursday, China’s Commerce Ministry announced that starting December 1, a license will be required for any foreign company to export products containing more than 0.1% rare earths from China or those made with Chinese production technology. The move triggered an immediate and forceful response from President Donald Trump, who on Friday threatened to impose an additional 100% tariff on Chinese goods and limit U.S. software exports.
While this appears to be the latest tit-for-tat exchange, the stakes are far higher than a simple trade dispute.
“We should not miss the fundamental point on rare earths: China has crafted a policy that gives it the power to forbid any country on Earth from participating in the modern economy,” wrote Dean Ball, who served as a senior advisor in the White House Office of Science and Technology Policy, in a post on X Saturday.
Ball explained that China achieved this dominance through a decades-long industrial strategy that other nations were unwilling to pursue. “They can do this because they diligently built industrial capacity no one else had the fortitude to build,” he wrote. “They were willing to tolerate costs—financial and environmental and otherwise—to do it. Now the rest of the world must do the same.”
China’s stranglehold on the rare earths market is nearly absolute, as it produces more than 90% of the world’s processed rare earths and the critical magnets derived from them. These materials are indispensable components across a vast array of industries, from consumer electronics and electric vehicles to advanced defense and aerospace systems.
Their importance is so critical that U.S. automotive companies have already been forced to curb production due to rare earth shortages, a direct consequence of China previously leveraging its supply to counter Trump’s tariffs.
This latest flare-up comes after a period of simmering tensions, despite ongoing talks between Washington and Beijing. The U.S. recently moved to restrict other countries’ exports of semiconductor technology to China and imposed new port fees on Chinese ships. Beijing swiftly retaliated with similar fees on U.S. vessels and launched an antitrust investigation into American chip giant Qualcomm.
“In other words, the United States can cut China off from the chips of today, but China can make it vastly harder to build the chips and other advanced technologies of tomorrow,” said Michael Froman, president of the Council on Foreign Relations and a former U.S. trade representative, in a Substack post.
However, some analysts believe China’s move may be a sign of economic distress rather than strength. Economist Robin Brooks, a senior fellow at the Brookings Institution, observed that markets anticipate Trump's new tariff threat will backfire on the U.S. but rejected the idea that China holds the upper hand.
Brooks argued that Chinese exporters are suffering steep profit losses due to existing U.S. tariffs. “This means that China may be using rare earths to escalate the standoff with the U.S. because it has no other choice,” he explained. “The hit to its export sector is just too considerable, making it necessary to raise the stakes in an effort to bring U.S. tariffs down.”
For its part, Beijing has remained defiant. The Commerce Ministry stated Sunday that while China does not want a tariff war, it is not afraid of one. It framed the export controls not as a ban but as a "sovereign right" to manage strategic resources.
Amid the escalating conflict, former advisor Dean Ball, now a senior fellow at the Foundation for American Innovation, sees an opportunity. He argued that China’s weaponization of its supply chain should serve as a wake-up call for the rest of the world to build new, resilient, and diversified sources for critical materials.
“Always remember that supply is elastic,” Ball concluded. “If our lives depend on it, we can surmount many challenges far faster than the policy planners in Beijing, Brussels, and Washington realize.”