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Why the US needs China's rare earths

October 16, 2025

China has escalated the trade war with the US by imposing strict export controls on rare earth minerals, which are essential components in high-tech manufacturing, electronics, and defense systems. The new regulations require government approval for all rare earth exports from China, which controls approximately 61% of production and 92% of processing globally. This strategic move directly impacts US industries that rely heavily on Chinese rare earth imports, with the US depending on China for 70% of its rare earth compounds and metals between 2020-2023.

Who is affected

  • US defense industry and manufacturers of military equipment including F-35 jets, Tomahawk missiles, and Predator drones
  • US high-tech manufacturing sector that produces electronics, computer components, and electric vehicles
  • US consumers who may face higher prices for technology products
  • Companies based in China that export rare earth minerals
  • Global supply chains dependent on Chinese rare earth processing

What action is being taken

  • China is requiring companies to obtain government approval before exporting rare earth minerals
  • China has expanded controls over rare earth exports, requiring explanation of intended use even for small quantities
  • The US Treasury Secretary has described China's actions as "economic coercion" while leaving room for negotiations
  • President Trump has ordered an investigation into national security risks posed by US reliance on foreign critical minerals
  • The US is seeking alternative sources for rare earth minerals

Why it matters

  • Rare earths are critical components in manufacturing technology products from smartphones to military hardware
  • China's near-monopoly on both extraction (61%) and processing (92%) gives it significant leverage in trade negotiations
  • The US relies on China for 70% of its rare earth imports, creating a strategic vulnerability
  • Defense technologies including F-35 jets and missiles depend on these minerals
  • The restrictions could cause manufacturing delays and price increases across multiple industries
  • The US currently lacks domestic capacity to process heavy rare earths, making it particularly vulnerable

What's next

  • No explicit next steps stated in the article

Read full article from source: BBC

Why the US needs China's rare earths