China expands rare-earth controls
- China has widened pressure on critical supply chains, keeping rare-earth export licenses tight even after a U.S.-China tariff truce revived broader trade talks. - Beijing’s April 4 controls covered seven medium and heavy rare-earth categories; by June, temporary six-month licenses reached suppliers to General Motors, Ford and Stellantis. - The shift turns tariffs into targeted industrial leverage. (reuters.com)
China did not roll back its rare-earth squeeze after the U.S.-China tariff truce. It kept export licenses in place and used approvals selectively. (reuters.com) (english.mofcom.gov.cn) On April 4, 2025, China’s Ministry of Commerce and customs agency imposed export controls on some medium and heavy rare-earth items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium-related products. Exporters now need licenses under China’s Export Control Law. (english.mofcom.gov.cn) Those elements sit inside magnets and components used in electric vehicles, military hardware, semiconductors and industrial equipment. China processes about 90% of the world’s rare earths, giving Beijing leverage far beyond the tariff line. (cnbc.com) (reuters.com) The truce eased some headline tariff pressure, but it did not restore normal trade. Reuters reported that Beijing added other targeted tools, including rules steering state-backed projects toward domestically made artificial-intelligence chips. (reuters.com) (stratnewsglobal.com) That chip guidance hit projects with public money. Reuters reported in November 2025 that new data-centre projects receiving state funds were told to use only domestic artificial-intelligence chips, with projects under 30% complete ordered to remove foreign chips or cancel purchases. (stratnewsglobal.com) The rare-earth controls were never just symbolic. In June 2025, Reuters reported that China granted temporary licenses to suppliers for General Motors, Ford and Stellantis, and some approvals were valid for six months. (cnbc.com) Those approvals followed visible strain in the auto sector. Ford said it shut Explorer production at its Chicago plant for a week in May because of a rare-earth shortage. (cnbc.com) Washington was also moving from broad tariffs to narrower pressure points. On January 14, 2026, President Donald Trump issued a Section 232 proclamation that imposed a 25% tariff on certain advanced semiconductors that do not support the buildout of the U.S. supply chain. (federalregister.gov) (whitehouse.gov) Congressional researchers said that semiconductor move worked with a new export-license rule to create a 25% fee component for chips sent to China under the administration’s “Chips Arrangement.” (congress.gov) The result is a trade fight that looks quieter on the surface and more specific underneath. Instead of across-the-board tariffs, both governments are leaning harder on chokepoints: minerals, chips, licenses and procurement rules. (reuters.com) (congress.gov)
