China Chokes Western Defence Supply With Minerals Stranglehold Ahead of Trump–Xi Meeting

HONG KONG — China has unveiled a new wave of restrictions on the export of rare earth minerals and related technologies, deepening its control over materials essential to global high-tech and defence industries.

The announcement, made by the Ministry of Commerce on Thursday, according to the Associated Press, underscores Beijing’s growing leverage in the ongoing trade and technology standoff with Washington.

China Chokes Western Defence Supply With Minerals Stranglehold

China is restricting supplies of critical minerals to Western defence firms, delaying production and forcing them to seek alternatives in other markets, the Wall Street Journal reported, citing sources at the companies.

For example, the newspaper points out, one drone manufacturer that supplies the US military was forced to delay orders for up to two months while it searched for a replacement for Chinese magnets made from rare earth metals.

Traders told the newspaper that some materials needed by the Western defense industry were now selling at prices five or more times higher than they were before China imposed the restrictions.

More than 80,000 components used by the Pentagon contain minerals that are subject to China’s export restrictions, the publication recalled. At the same time, almost all of the US military’s supply chains for these minerals depend on at least one Chinese supplier, so Beijing’s restrictions could cause major problems for the US military.

Under the new rules, foreign companies must now obtain special licences to export any products containing rare earth elements sourced from China — even if those products are manufactured abroad. The measures also extend to the export of technologies used in mining, smelting, recycling, and magnet production, key processes in the global supply chain for electric vehicles, wind turbines, jet engines, and advanced military equipment.

The ministry said the move aims to “safeguard national security” and prevent Chinese rare earth materials from being used in “sensitive military applications.” Officials accused unnamed “foreign entities” of transferring rare earths and related know-how for military purposes, causing what it called “significant harm” to China’s national interests.

In addition, Western buyers told the newspaper that China was requesting detailed information about the purpose of the purchased minerals so that they were not used by Western companies in military production.

In early April, the Chinese Commerce Ministry said that Beijing had placed 16 US companies on an export control list to control the export of dual-use goods. As the New York Times noted, Beijing has suspended the export of a wide range of critical minerals and magnets, which are needed, in particular, to assemble cars, drones, robots and missiles.

In June, the Wall Street Journal reported, citing people familiar with the matter, that China had agreed to resume issuing rare earth export licenses to US automakers and industrial plants, but limited the permits to six months. Reuters also reported, citing people familiar with the matter, that China had not committed to granting export permits for some specialized rare earth magnets that US military suppliers need for fighter jets and missile systems.

Rare earth elements are a group of 17 metals that are widely used in high-tech devices, including computers, televisions, and smartphones, as well as in defense technologies, including missiles, lasers, transportation systems, and military communications.

A Strategic Play in a Global Power Game

According to the Associated Press, analysts view the move as a calculated response to U.S. export restrictions on semiconductors and advanced technologies imposed under former President Donald Trump’s administration and maintained under current trade policy frameworks.

Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, told AP that Beijing’s policy has “evolved into a potent instrument of economic and geopolitical leverage.”

“China’s rare earth policy is no longer about market regulation — it’s about strategic influence,” Baskaran said.

China produces roughly 70% of the world’s rare earth minerals and controls about 90% of their global processing capacity, giving it overwhelming dominance in the supply of materials vital to Western industries.

Neha Mukherjee, a rare earths analyst at Benchmark Mineral Intelligence, described the new controls as “a strategic mirror” of Washington’s own chip export rules.

“Most rare earth magnet manufacturers in the U.S., Japan, and Europe still depend heavily on Chinese supply,” Mukherjee noted. “These new restrictions will force tough choices — particularly for companies in the defence sector, where export approvals are expected to be scarce.”

Global Reactions and Implications

The announcement comes just weeks before a planned meeting between President Donald Trump and Chinese leader Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea later this month.

George Chen, a partner at The Asia Group, told the Associated Press that the timing is deliberate.

“Both sides are posturing ahead of negotiations,” Chen said. “Rare earths will be a critical bargaining chip. Expect plenty of noise before any substantive deal emerges.”

In Washington, Trump said during a cabinet meeting that he had yet to be briefed on the new Chinese restrictions but hinted at potential retaliatory measures.

“We import massive amounts from China — maybe we’ll have to stop doing that,” Trump said.

The European Commission also expressed concern, urging China to act as a “reliable partner.” Commission spokesperson Olof Gill said Brussels would review the implications of the move and continue efforts to diversify Europe’s sources of critical raw materials.

Driving a Global Supply Chain Shift

Industry experts predict the move will accelerate Western efforts to build independent rare earth supply chains. According to AP, over $520 million in new investments were made in the U.S. rare earths sector during the second quarter of this year, much of it supported by government funding.

Recent deals — such as Noveon’s agreement with Australia’s Lynas Rare Earths and MP Materials’ new magnet plant in Texas — signal momentum toward reducing dependence on Chinese processing.

An MP Materials spokesperson told AP that “China’s action reinforces the need for forward-leaning U.S. industrial policy. Building resilient supply chains is a matter of economic and national security.”

Wade Senti, president of U.S.-based magnet maker AML, echoed that sentiment:

“The chess game China is playing underscores the importance of innovation — not just reaction. The U.S. must lead with new technologies that redefine the field.”

A New Phase in the Trade War

Nazak Nikakhtar, a former U.S. Commerce Department undersecretary, described the latest Chinese controls as a “major escalation”, extending the economic rivalry into the broader domain of materials science and manufacturing equipment.

“This should be a wake-up call for Washington,” Nikakhtar told AP. “We must reinvest in domestic capabilities and rebuild America’s rare earths industrial base.”

China previously imposed curbs on the export of several rare earth elements in April after Washington raised tariffs on key imports. While Beijing later eased some restrictions, the new regulatory framework represents a much wider and more permanent tightening of control over global supply.

As the world braces for another round of trade negotiations, China’s message appears unmistakable:
its dominance in critical minerals is now both an economic weapon and a negotiating tool.

The post China Chokes Western Defence Supply With Minerals Stranglehold Ahead of Trump–Xi Meeting first appeared on The Zimbabwe Mail.