How China wields rare earths as a strategic weapon

China's chokehold on rare earths — the minerals essential for electronic, automotive and defense systems — gives it significant leverage over the United States during ongoing trade talks. With control over about 60% of global rare earth production and nearly 90% of refining, China has been tightening its grip by imposing export restrictions on rare earth elements and permanent magnets.

Some of the curbs, partly in response to sky-high tariffs on Chinese exports imposed by US President Donald Trump, were later eased to allow trade negotiations with the United States to proceed.

But, on Thursday, China announced sweeping new export controls on rare earths, expanding curbs on processing technology, and explicitly limiting exports to overseas defense and semiconductor users. This is Beijing's own version of the US foreign direct product rule, which saw Washington curb chip exports from third countries to China. The move, weeks before a face-to-face meeting between Trump and Chinese President Xi Jinping, further exposed US vulnerabilities, as the United States lacks domestic refining capacity.

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