China Chokes Rare Earth Supply, Exposing Global Weakness


China Chokes Rare Earth Supply, Exposing Global Weakness
Image source: CoinToday
- U.S. sectors reel from China’s mineral squeeze, halting EV plants. - New trade deal exposes long-term security risks for U.S. defense. On April 4, 2025, Beijing weaponized its rare earth exports. This move crippled global industries and sparked a geopolitical scramble for resources. China's Ministry of Commerce imposed restrictions on seven critical rare earth elements and the magnets made from them: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. According to Cryptopolitan on June 29, 2025, China took these actions in direct response to heightened U.S. tariffs on its goods. The decision laid bare how dependent the United States and the world are on China's control over rare earth supply chains. The impact has been swift and severe. Ford halted production at its Chicago EV plant due to a magnet shortage, while multiple auto parts factories in Europe also shut down. Industries such as electric vehicle manufacturing, wind turbine assembly, and defense technology are struggling to replace the restricted materials. Although some automakers are exploring motors that lessen their reliance on rare earths, scalable solutions remain years away, prolonging the disruptions. Trade talks in London in mid-June led to a partial framework agreement that offers limited relief. China agreed to issue six-month export licenses for rare earths to select U.S. companies. However, the agreement shuts out defense contractors, denying them access to critical components for fighter jets and missile systems. To apply for a license, companies face invasive requirements. They must provide sensitive production data, end-user details, and facility images, which fuels concerns over corporate espionage and national security vulnerabilities. In response, geopolitical tension has mounted. At the June 2025 G7 summit in Canada, global leaders accused China of “weaponizing” its control over vital resources. The G7 and EU unveiled a "Critical Minerals Action Plan" to reduce their reliance on Chinese supplies. The plan focuses on diversified sourcing, recycling, and new mining ventures. They expect to establish a standards-driven roadmap for rare earth markets by the end of the year. Despite the trade deal's easing measures, U.S. defense industries remain constrained by soaring costs and scarcity. The situation has intensified the urgency for nations to diversify supply chains and rethink their vulnerabilities rooted in resource dependencies. The crisis is also causing market turbulence. As of June 29, Tesla (TSLA) traded at $1,234.56, reflecting a 4.5% increase in 24-hour volume. This activity underscores how shifting resource dynamics and industry adjustments are impacting the market.
Article Info
Category
Market
Published
2025-06-29 17:20
NFT ID
PENDING
News NFT detail

Get the latest news in your inbox!


Recommended News

About Us

 | Contact Us | 

Privacy Policy

 | 

RSS