China Suspends Rare Earth Shipments, Sending Shockwaves Through Tech Industry

The New York Times reported that China had suspended the export of rare earth minerals, magnets, and other products used by automakers and military contractors in response to President Donald Trump’s tariffs against China.

According to the report, China has halted exports as it develops a new regulatory framework requiring export licenses. According to the Times, China could permanently stop exports to certain companies, including U.S. defense contractors.

The Times reported that China had barely begun its new system. If the process was prolonged, global supplies could be affected, given that China holds a monopoly over the supply of heavy rare-earth metals in the world, according to the article. According to the report, China produces 90% of all rare earth magnets.

One mining leader told The Times that the impact of the military contractors on the U.S. economy is a particular concern.

James Litinsky, CEO of MP Materials Corp., told The Times that “Drones, robotics, and artificial intelligence are the future of warfare. Based on what we see, critical inputs to our future supply chain have been shut down.”

China placed export restrictions 10 days ago on rare earth minerals that are vital for the production of electric car batteries and smartphones. On April 4, samarium, gadolinium, and other items related to terbium were placed on an export control listing.

This was in response to Trump’s Tariffs, which went into effect April 2. Trump has since increased tariffs on Chinese imports up to 145%. China responded by imposing 125% tariffs against U.S. imports.