When President Donald Trump unleashed a fresh wave of global tariffs, he made a calculated exception. Smartphones, laptops, semiconductors—items central to American life and largely made in China—were spared. The decision was a tactical reprieve for tech giants like Apple, Dell, and Nvidia, all heavily reliant on Chinese supply chains.
But beneath this short-term relief lies a much bigger game: one of minerals, missiles, and magnets.
China strikes back with critical minerals
In a move that escalated tensions significantly, Beijing retaliated not just with words or reciprocal tariffs, but with something far more potent—rare earth elements. On 3 April, China imposed export restrictions on seven heavy and medium rare earths, including dysprosium and yttrium, metals critical to American defence systems.
“They are definitely arrows in their quiver of how China can respond to these ever-increasing tariffs,” said Tom Brady, professor of practice at the Colorado School of Mines.
Yttrium is used for radar systems, lasers, and jet coatings. Dysprosium keeps magnets stable under extreme heat, essential in engines and missiles. Without them, America’s Next Generation Air Dominance ( NGAD) fighter jets—touted by Trump as successors to the F-22 Raptor—could be grounded before take-off.
Why it matters: A fragile backbone
Jamie Underwood from consultancy SFA-Oxford put it bluntly: “China’s export controls on key medium and heavy rare earth elements pose significant risks to US national security, defence manufacturing, and high-tech industries.”
These minerals aren't just used in the military. They're inside electric vehicles, smartphones, medical devices, and satellites. Gallium, restricted by China last year, is vital for semiconductors and AI systems. And now, Chinese ports are paralysed, awaiting a licensing system that doesn’t yet exist.
“Does the export control or ban potentially have severe effects in the U.S.? Yes,” warned Daniel Pickard, chair of the U.S. critical minerals advisory committee.
Michael Silver, CEO of American Elements, said delays could stretch to 45 days or more: “We increased our inventory last winter in anticipation of a trade war.”
Scrambling for independence
Trump’s team is aware of the stakes. On 20 March, he signed an executive order to boost domestic mineral production using the Defence Production Act. The plan includes streamlining permits and identifying federal lands with strategic reserves.
Harvey Kaye, executive director of US Critical Materials, is hopeful: “To use some of the current administration words, you could say ‘make America critically mineral independent again.’”
Kaye’s company is developing the Sheep Creek site in Montana, home to some of the highest-grade gallium deposits found outside China. His goal? “To stand on the steps of Congress and deliver a bag of processed or separated rare earths and gallium to the government by the first quarter of 2026.”
But confidence is shaky
Despite bold rhetoric, the investment climate remains tense. Trump’s tariff jump to 125 percent on Chinese goods, alongside a pause for others, has left the industry in limbo.
“What kind of serious investor is going to put up big dollars for that with this much uncertainty?” asked Brady.
He stressed the need for legislative action rather than executive orders, which could be undone by future administrations. “It’s just not like a light switch,” he said. “It’s going to take years to develop, to get those processes dialled in and optimised.”
A magnet for chaos
Meanwhile, China’s grip on rare earth magnets—used in everything from drones to electric vehicles—has tightened. On 4 April, Beijing imposed new rules requiring special export licences, effectively halting shipments. Since China accounts for 90 percent of global rare earth magnet production, the disruption has caused immediate pain.
Foreign companies are being told it may take over a month to resume trade. Chinese customs are reportedly enforcing the rules inconsistently, with lab tests and port-specific exemptions adding to the chaos.
History repeats
China has weaponised rare earths before. In 2010, after a maritime dispute with Japan, it halted all exports of the minerals to Tokyo. The lesson wasn't lost on countries like Japan, which has since built large stockpiles.
The US, however, did not. Many American firms avoided stockpiling to reduce capital costs. Now, that decision looks short-sighted.
James Litinsky, executive chairman of MP Materials, which operates the US’s only rare earth mine, issued a stark warning: “Drones and robotics are widely considered the future of warfare… and the critical inputs for our future supply chain are shut down.”
Prices are spiralling
This isn’t just about geopolitics—it’s about skyrocketing prices too. Dysprosium oxide is trading at $204 per kilogram in Shanghai, with international prices climbing higher.
Other critical minerals are also experiencing alarming surges. Antimony, essential for ammunition and flame retardants, has quadrupled in price since 2024 due to Chinese export controls. Hafnium and rhenium, used in jet engines and medical implants, have also surged due to sudden Chinese buying and global supply constraints.
The lack of visibility in these opaque markets has caught many industries off guard.
Europe’s dilemma, America’s warning
Europe is also feeling the crunch. Its military buildup has run headlong into rare metal price spikes. Politicians are waking up to the reality that weapon systems rely on obscure, expensive materials.
Rhenium has doubled in price year on year. Hafnium still trades far above its pre-2022 average. The squeeze is real—and global.
The bigger picture is clear: minerals once relegated to back pages are now central to global power struggles.
Trump may believe he’s forcing China to the table. But China, with its near-monopoly on critical minerals, has other levers to pull. And it’s started pulling them.
The battle over rare earths is no longer a quiet trade skirmish. It’s a geopolitical flashpoint that could reshape the world’s supply chains—and leave industries scrambling for alternatives.
America is trying to mine its way to independence. But for now, the clock is ticking, the prices are rising, and the minerals aren’t moving.
But beneath this short-term relief lies a much bigger game: one of minerals, missiles, and magnets.
China strikes back with critical minerals
In a move that escalated tensions significantly, Beijing retaliated not just with words or reciprocal tariffs, but with something far more potent—rare earth elements. On 3 April, China imposed export restrictions on seven heavy and medium rare earths, including dysprosium and yttrium, metals critical to American defence systems.
“They are definitely arrows in their quiver of how China can respond to these ever-increasing tariffs,” said Tom Brady, professor of practice at the Colorado School of Mines.
Yttrium is used for radar systems, lasers, and jet coatings. Dysprosium keeps magnets stable under extreme heat, essential in engines and missiles. Without them, America’s Next Generation Air Dominance ( NGAD) fighter jets—touted by Trump as successors to the F-22 Raptor—could be grounded before take-off.
Why it matters: A fragile backbone
Jamie Underwood from consultancy SFA-Oxford put it bluntly: “China’s export controls on key medium and heavy rare earth elements pose significant risks to US national security, defence manufacturing, and high-tech industries.”
These minerals aren't just used in the military. They're inside electric vehicles, smartphones, medical devices, and satellites. Gallium, restricted by China last year, is vital for semiconductors and AI systems. And now, Chinese ports are paralysed, awaiting a licensing system that doesn’t yet exist.
“Does the export control or ban potentially have severe effects in the U.S.? Yes,” warned Daniel Pickard, chair of the U.S. critical minerals advisory committee.
Michael Silver, CEO of American Elements, said delays could stretch to 45 days or more: “We increased our inventory last winter in anticipation of a trade war.”
Scrambling for independence
Trump’s team is aware of the stakes. On 20 March, he signed an executive order to boost domestic mineral production using the Defence Production Act. The plan includes streamlining permits and identifying federal lands with strategic reserves.
Harvey Kaye, executive director of US Critical Materials, is hopeful: “To use some of the current administration words, you could say ‘make America critically mineral independent again.’”
Kaye’s company is developing the Sheep Creek site in Montana, home to some of the highest-grade gallium deposits found outside China. His goal? “To stand on the steps of Congress and deliver a bag of processed or separated rare earths and gallium to the government by the first quarter of 2026.”
But confidence is shaky
Despite bold rhetoric, the investment climate remains tense. Trump’s tariff jump to 125 percent on Chinese goods, alongside a pause for others, has left the industry in limbo.
“What kind of serious investor is going to put up big dollars for that with this much uncertainty?” asked Brady.
He stressed the need for legislative action rather than executive orders, which could be undone by future administrations. “It’s just not like a light switch,” he said. “It’s going to take years to develop, to get those processes dialled in and optimised.”
A magnet for chaos
Meanwhile, China’s grip on rare earth magnets—used in everything from drones to electric vehicles—has tightened. On 4 April, Beijing imposed new rules requiring special export licences, effectively halting shipments. Since China accounts for 90 percent of global rare earth magnet production, the disruption has caused immediate pain.
Foreign companies are being told it may take over a month to resume trade. Chinese customs are reportedly enforcing the rules inconsistently, with lab tests and port-specific exemptions adding to the chaos.
History repeats
China has weaponised rare earths before. In 2010, after a maritime dispute with Japan, it halted all exports of the minerals to Tokyo. The lesson wasn't lost on countries like Japan, which has since built large stockpiles.
The US, however, did not. Many American firms avoided stockpiling to reduce capital costs. Now, that decision looks short-sighted.
James Litinsky, executive chairman of MP Materials, which operates the US’s only rare earth mine, issued a stark warning: “Drones and robotics are widely considered the future of warfare… and the critical inputs for our future supply chain are shut down.”
Prices are spiralling
This isn’t just about geopolitics—it’s about skyrocketing prices too. Dysprosium oxide is trading at $204 per kilogram in Shanghai, with international prices climbing higher.
Other critical minerals are also experiencing alarming surges. Antimony, essential for ammunition and flame retardants, has quadrupled in price since 2024 due to Chinese export controls. Hafnium and rhenium, used in jet engines and medical implants, have also surged due to sudden Chinese buying and global supply constraints.
The lack of visibility in these opaque markets has caught many industries off guard.
Europe’s dilemma, America’s warning
Europe is also feeling the crunch. Its military buildup has run headlong into rare metal price spikes. Politicians are waking up to the reality that weapon systems rely on obscure, expensive materials.
Rhenium has doubled in price year on year. Hafnium still trades far above its pre-2022 average. The squeeze is real—and global.
The bigger picture is clear: minerals once relegated to back pages are now central to global power struggles.
Trump may believe he’s forcing China to the table. But China, with its near-monopoly on critical minerals, has other levers to pull. And it’s started pulling them.
The battle over rare earths is no longer a quiet trade skirmish. It’s a geopolitical flashpoint that could reshape the world’s supply chains—and leave industries scrambling for alternatives.
America is trying to mine its way to independence. But for now, the clock is ticking, the prices are rising, and the minerals aren’t moving.
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