How Chinas threats to clamp down on rare earth exports could wreak havoc on US tech giants, military contractors | Latest Tech News
China’s pledge to choke off shipments of rare earth components could wreak havoc on tech giants like Apple and Tesla as effectively as big US military contractors – and specialists called it a major bargaining chip as Beijing haggles with President Trump over tariffs.
US firms and traders alike are scrambling to assess the affect of Beijing’s announcement that overseas entities must get hold of particular licenses starting Dec. 1 to export merchandise containing more than 0.1% of rare earth metals and magnets originating in China.
Stocks rallied on Monday after Trump said relations with China might be “fine” despite the latest dustup. The rebound occurred after Trump’s announcement of a 100% retaliatory tariff on Chinese items beginning Nov. 1 triggered the most important single-day selloff in six months last Friday.
Shares of US-based rare earth mining firms USA Rare Earth, Critical Metals and MP Materials all surged 20% or more on Monday.
China has a near-monopoly over the world’s provide of rare earth metals. REUTERS
China could have “significant discretion to delay, deny, or condition exports” involving superior technology, according to Gracelin Baskaran, director of the Critical Minerals Security Program at CSIS. The vital minerals are needed to construct iPhones, electric vehicles, drone motors, F-35 fighter jets and Tomahawk missiles.
“The move both strengthens Beijing’s leverage in upcoming talks while also undercutting US efforts to bolster its industrial base,” Baskaran said in a weblog post.
It’s unclear how China plans to implement the principles as US companies scramble to perceive how to get hold of export licenses and comply with their excessive necessities. Experts have warned for months that those provide chain hiccups will lead to larger costs for Americans shopping for tech gadgets.
Any license functions for merchandise with military makes use of are doubtless to be rejected, China’s Commerce Ministry said. Licenses associated to artificial intelligence merchandise and chip manufacturing might be reviewed on a case-by-case foundation.
Mark A. Smith, the CEO of Nebraska-based rare earths mining firm NioCorp, said he doubts Beijing will give up its strategic leverage even if commerce talks go effectively.
Rare earths are needed to building F-35 fighter jets. AFP via Getty Images
“I don’t see China negotiating away the dual use export control regime they have put into place for heavy rare earths,” Smith told The Post. “They will say good issues about this not being a ban on rare earth exports, and they’ll sound accommodating.
“But the People’s Liberation Army will almost certainly ensure that export licenses that could possibly allow [rare earths] to make their way into defense technologies won’t see the light of day,” Smith said.
China, which controls about 70% of global rare earth mining and about 90% of processing capabilities, has steadily cut off access in current years amid rising tensions with the West.
In April, China snarled worldwide shipments and left Western firms scrambling after it abruptly announced a separate set of licensing necessities on rare earth magnets.
An worker makes use of Apple’s new iPhone 17 smartphone, which is demonstrated in a store during preparations for the sequence’ launch of gross sales in Moscow, Russia, September 20, 2025. REUTERS
Meanwhile, the US has imposed restrictions on gross sales of superior laptop chips, such as those offered by Nvidia, due to national security issues.
As The Post reported, many specialists concern that China could implement a whole embargo if diplomatic tensions take a more critical flip – such as in the event of an invasion of Taiwan.
Aside from its cargo restrictions, China said it might restrict exports of applied sciences associated to mining, smelting, recycling and magnet-making – making it more tough for the US and other international locations to ramp up home manufacturing.
President Donald Trump, left, shakes palms with China’s President Xi Jinping during a assembly on the sidelines of the G-20 summit in Osaka, Japan, June 29, 2019. AP
The guidelines have been announced just weeks before Trump and Chinese President Xi Jinping are set to meet on the sidelines of the Asia-Pacific Economic Cooperation discussion board in South Korea. Trump has threatened to cancel that assembly.
“China’s latest round of export-rule tightening underscores what manufacturers have long known: The US must increase and fortify its domestic critical minerals supply,” said Michael Davin, director of power and assets coverage at the National Association of Manufacturers.
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