China suspends rare earth exports, kneecapping US industry reliant on Beijing’s ‘monopoly’
China has stopped shipping some heavy rare earth metals and magnets critical to US production of everything from cellphones to fighter jets as Beijing’s trade war with Washington simmers, leaving American industry in a bind.
Effective April 3, China is no longer exporting seven heavy rare earth metals processed exclusively in the Asian power, as well as heavy rare earth magnets — of which about 90% of the world’s supply are also synthesized on Beijing’s territory.
The export halt applies to all countries, but access to elements like dysprosium and yttrium is critical to US industry — especially in the tech, electric vehicle, aircraft and defense sectors, according to Drew Horn, who served as the top US official on strategic minerals and energy supply chain development in President Trump’s first administration
“Rare earths are in everything,” he told The Post Monday, singling out “the EV and auto space … [and] everything from cellphones, defense key components, [and] space travel.”
“China,” Horn added, “has essentially created an all-powerful monopoly with them.”
Instead of only hiking the price US companies have to pay to sell goods inside China via tariffs, Beijing also appears to be using its export capability to move the needle against Washington.
“The Chinese have been threatening this because they do have that leverage to basically cut us off and cut the world off, which essentially cuts us off through all sorts of different means, and now they’re doing it,” said Horn, whose consulting firm GreenMet Advisory works to expand the US mining industry.
Beijing had previously threatened to stop shipping the rare earth elements during Trump’s first administration, with President Xi Jinping making a public visit to a magnet factory in Ganzhou during a time of tense US trade relations in 2019.
Nearly a decade earlier, in 2010, China did suspend the export of heavy rare earths to Japan during a territorial dispute.
“Beijing’s rare earth play is a card they’ve used before — and overplayed,” said Craig Singleton, senior China fellow at the Foundation for Defense of Democracies. “The US response this time is less panic, more resolve. Washington sees these latest moves as further justification to fast-track domestic production and friend-shoring strategies, thereby reducing China’s ability to escalate today’s tariff fight to other domains, like rare earths, where it has leverage.”
Becoming independent of — or at least less reliant on — China for rare earths has been a growing interest of Trump’s since before he took office a second time this past January.
His recent pursuits of both a mineral deal with Ukraine and a partnership or takeover of resource-rich Greenland have been motivated by an understanding of overreliance on China for key manufacturing components, insiders have told The Post.
But even if the US got its hands on the pure rare earths, experts say it would still need to build facilities to process the elements, which could take years.
“In a lot of ways, the midstream processing is the most difficult to do, not necessarily from a technology perspective, but because China owns all of it, or controls all of it,” Horn said. “So even if you dig it up, you have to ship to [Chinese refineries] exclusively.”
Still, Horn believes that processing facilities could be up and running before 2026 if action is taken now.
“I think there needs to be industry support and buy-in,” he said. “I’m not an advocate of eternal government subsidies or artificial industries, but what I think needs to be done is, there needs to be a variety of incentives, protective measures, tax incentives, funding grants, loan guarantees, etc., to allow some of these new — honestly better, cleaner, more innovative solutions to get up and running in the United States.”
Horn warned such incentives and safeguards are needed to shield potential American competitors and their customers from Chinese retaliation.
“If we went to Boeing and said, ‘OK, you need to source exclusively from us or from non-Chinese sources,'” he said, “the retaliatory actions [by Beijing] would basically be to go through the entire Boeing supply chain, throughout their entire ecosystem, and basically cut them off.”
