Highlights

• China's rare earth export controls spark market volatility across Asian stock exchanges
• US and China escalate economic leverage through technology and raw material restrictions
• Mineral trade policies become a new form of geopolitical and economic negotiation strategy

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It’s Monday in Asia, and the screens are bleeding red (opens in a new tab). From Seoul to Sydney, markets opened sharply lower after President Donald Trump’s threat to impose 100% tariffs on Chinese imports in response to Beijing’s new rare earth export controls.

According to CNN Business, over in Asia, the KOSPI slid 1.5%, Taiwan’s TAIEX fell 2.3%, the Hang Seng Index tumbled 2.4%, and the Shanghai Composite dropped 1.6%. For context, that’s not a market crash—yet—but a jolt signaling how deeply rare earths sit in the nerves of modern manufacturing. The Tokyo Stock Exchange was closed for a public holiday, meaning Japan’s reaction will come later—and could magnify the volatility.

Still, trading days are long in Asia. With tariff threats often morphing into negotiation gambits, markets could reverse before the close if either side blinks or offers conciliatory rhetoric.

Beneath the Headlines: Minerals and Momentum

CNN’s framing appears largely accurate. China’s October 9 export controls—covering a dozen rare earth elements and related equipment—are real, and they’ve spooked tech-heavy economies like Taiwan, South Korea, and Japan, which depend on China’s refined oxides for magnets, chips, and batteries. The network correctly notes that these restrictions don’t even take full effect until November, yet they’ve already injected uncertainty into semiconductor and EV supply chains.

However, the piece glosses over the deeper context: these aren’t “new” hostilities so much as old fault lines reopening. Beijing’s rare earth play mirrors Washington’s earlier export bans on advanced chips. Both sides are now deploying industrial leverage—the U.S. through technology, China through raw materials.

What’s Solid, What’s Smoke

At the factual core, according to the Rare Earth Exchanges (REEx) understanding, the market data checks out. The indices did open lower, and the tariffs—if enacted—would bring total duties near 130%, approaching spring’s peak trade-war levels.

However, the claim that this equates to an “effective trade embargo” feels like possible overreach. Tariffs can be walked back faster than mining capacity can be built. The term “hostile move” in the real world must consider that China’s licensing system, while protectionist, still allows for approvals and exemptions.

The Real Story for Rare Earths

Perhaps more than anything, today’s slump is not about numbers—it’s about narrative control. China has reminded the world that it holds the switch on critical minerals, and for that matter, rare metallic element flow, while the U.S. has responded with the economic equivalent of saber rattling. Perhaps President Trump will hit back with some unexpected, unanticipated moves, but for now, at least for investors, rare earth policy becomes monetary policy by other means.

If Washington and Beijing cool their rhetoric, Asia’s markets could finish the day far less bruised. But the underlying truth remains—the age of metallic elements and minerals as leverage has officially arrived.

Source: CNN Business, October 12, 2025

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