China halts rare earth exports amid Trump tariff tensions, threatening global supply chains

China halts rare earth exports, escalating trade tensions with US.

China has suspended the export of a broad range of rare earth metals and magnets, tightening its grip on critical components that underpin global industries, including electric vehicles, aerospace, semiconductors, and defence manufacturing.

According to The New York Times, the move is part of Beijing’s retaliation against President Donald Trump’s sharp tariff increases that began on 2 April.

On 4 April, China imposed new restrictions on the export of six heavy rare earth elements—metals that are refined exclusively in China—as well as rare earth magnets, which are used in electric motors, robotics, drones, missiles, and other advanced technologies. Currently, China accounts for 90% of the global production of rare earth magnets and had produced 99% of the world’s heavy rare earth metals until recently.

The new restrictions require exporters to obtain special licenses, but the Chinese government has not yet established a functioning licensing system. As a result, shipments have been halted at many Chinese ports, leaving foreign buyers uncertain about when exports will resume.

“Does the export control or ban potentially have severe effects in the U.S.? Yes,” said Daniel Pickard, chair of the critical minerals advisory committee for the U.S. Trade Representative and Department of Commerce. He warned that a prolonged disruption could damage China’s image as a reliable supplier.

Michael Silver, CEO of American Elements, a chemical supplier based in Los Angeles, told The New York Times his company had been informed it could take 45 days before licenses are granted. “We increased our inventory last winter in anticipation of a trade war,” Silver said, adding that existing contracts can still be met for now.

The clampdown is already disrupting supply chains. Without steady access to rare earth magnets, manufacturers in Detroit and beyond could soon face production halts. These powerful magnets are essential for motors used in both electric and conventional vehicles, as well as drones and guided missiles.

One of the metals under restriction, dysprosium oxide, currently sells for $204 per kilogram in Shanghai—substantially more on international markets. With prices rising and supply frozen, industries worldwide face escalating costs and potential slowdowns.

Notably, Chinese customs officials are enforcing the restrictions differently across ports. Some allow limited exports if magnets contain only traces of heavy rare earths and are not headed to the U.S. Others demand lab tests to prove compliance before any shipment is cleared.

Adding to the uncertainty, the Chinese Ministry of Commerce has banned domestic firms from dealing with an expanding list of American companies, particularly in the defence sector, the NYT report said. James Litinsky, executive chairman of MP Materials, which operates the only U.S.-based rare earth mine, warned: “Drones and robotics are widely considered the future of warfare… and the critical inputs for our future supply chain are shut down.”

Meanwhile, countries like Japan—once stung by a 2010 Chinese export embargo—have built up stockpiles of rare earths. However, many American firms maintain minimal inventories to avoid tying up capital in high-value materials.

China’s dominance in the rare earths industry is rooted in its rich deposits and centralised processing infrastructure, particularly around Longnan and Ganzhou in Jiangxi Province. Factories there, such as JL Mag Rare-Earth Company, supply global giants like Tesla and BYD with state-of-the-art magnets.

The halt in exports coincides with resumed mining activity near Longnan, despite prior environmental concerns. On Friday, machinery and chemical processing at one site suggested mining had quietly restarted.

Beijing's move signals a decisive escalation in the trade confrontation, wielding rare earths not just as commodities but as instruments of geopolitical power.