China begins restricting access to critical minerals amid US trade war

Beijing has reportedly started implementing export restrictions on a range of critical rare earth elements in response to the Trump administration’s escalating tariffs on China, which rose to an upper limit of 245% for some products this week.

First things first: Rare earth metals are a group of 17 metallic elements that share a somewhat misleading name. While the elements aren’t rare in terms of their abundance in the Earth's crust, they’re often difficult to extract from the ground and process into usable products.

• Rare earth metals are considered crucial ingredients in a wide range of technologies, including computer chips, EV batteries/motors, radar systems, fighter jets, solar panels, smartphone touchscreens, submarines, missiles, and wind turbines.

US firms can’t easily replace China

The Chinese government holds a near-monopoly over the supply of global rare earths production and processing, meaning its latest restrictions could pose a serious threat to various US industries, per a new report from the Center for Strategic and International Studies (CSIS).

• China currently controls ~70% of the world’s rare earth production—including 99.9% of all dysprosium, used by chip giant Nvidia to create capacitors—in addition to 90% of global rare earth refining.
• On the other hand, the US has a single operational mine in California which produces ~15% of global rare earths, but relies mainly on Chinese firms for refinement.
• The US would be incapable of filling that gap if China completely shut down rare earth element exports for an extended period, per the CSIS report.

In other tariff news: California state leaders filed a federal lawsuit yesterday seeking to halt the Trump admin’s recent sweeping tariffs on US trading partners, arguing it was illegal for Trump to use certain emergency powers to impose them.