China Weaponizes Seven Strategic Rare Earths in Escalating Trade War

Highlights

• China restricts exports of 7 rare earth elements crucial for defense and high-tech industries.
• China controls over 90% of global refining capacity of these rare earth elements.
• The export controls target materials like terbium, yttrium, and dysprosium.
• The U.S. is vulnerable due to minimal domestic processing capabilities.
• The strategic move highlights the urgent need for the U.S. to diversify and develop domestic rare earth element supply chains.

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In response to escalating U.S. tariffs, China has imposed export controls on seven rare earth elements vital to defense and advanced manufacturing, according to a News | World article published April 17th. The elements—terbium, yttrium, dysprosium, gadolinium, lutetium, samarium, and scandium—are essential for high-performance magnets, nuclear reactor rods, lasers, and clean energy technologies. China, which controls over 90% of global refining capacity, is leveraging its near-monopoly to restrict U.S. access to these “dual-use” materials, citing national security and military relevance. U.S. processing capability for most of these elements remains nearly nonexistent, leaving the country acutely vulnerable.

Notably, China has not restricted exports of neodymium and praseodymium, the two most widely used rare earths in EV and wind turbine magnets—likely to preserve economic leverage while tightening the screws on more niche, harder-to-replace materials.

Analysts from Project Blue (opens in a new tab) and the U.S. Geological Survey (opens in a new tab) confirm that America remains heavily reliant on Chinese supply chains for all seven restricted elements. With domestic projects years from scaling, the move underscores the urgency of accelerating U.S.-based refining and diversification efforts. 

But what comes next for America in the short term? Will Donald Trump reverse course and strike a deal? Or will China’s mounting internal pressures—economic slowdown, debt, and political unrest—undermine its ability to sustain this strategic squeeze? Rare Earth Exchanges will be there to chronicle this unfolding crisis.