The trade war between the United States and China is now in full swing. U.S. President Donald Trump has retaliated against Beijing’s own retaliatory tariffs, imposing an additional 50 percent levy on China on Tuesday. Companies importing goods from China will now have to pay a tariff worth more than the product itself.

Lost in the week of bruising trade combat is a new set of Chinese constraints on all exports of seven so-called rare earths — a group of 17 elements that are used in everything from smartphones to missiles. The rule adds to a December ban on exports to the U.S. of antinomy, gallium and germanium, and February export controls on tungsten and four other metals that have potential military applications.

Chinese companies, which dominate global rare earths mining and processing, will now have to seek licenses for overseas sales of these seven elements and some products containing them. While the controls do not amount to a ban, a reduction in supply from China would give importers like the United States impetus to seek alternative suppliers.

Rare Earth Element	Selected Uses	Other Known Source Countries
Yttrium	Aerospace components, X-ray tubes, baseball bats, lights, semiconductors	Australia, Brazil, India, United States
Scandium	Rechargeable batteries, high-temperature superconductors	Iceland, Madagascar, Scandinavia
Samarium	Nuclear reactor control rods and shielding, lasers, microwave filters	Australia, India, Russia, United States
Dysprosium	Magnets, lasers, catalysts, nuclear reactors	Australia, India, Russia, United States
Lutetium	Medical imaging equipment, superconductors, eyeglass lenses	Australia, India, Russia, United States
Terbium	Lighting equipment, display screens, lasers, fluorescent lamps, optical computer memories	Australia, India, Russia, United States
Gadolinium	MRI equipment, memory chips, CDs	Australia, China, India, Russia, United States

Source: U.S. Geological Survey (uses); Purdue University (locations)

The U.S. has made some progress in producing its own rare earths — output tripled between 2018 and 2022, according to the U.S. Geological Survey. But it still relied on imports for four-fifths of its consumption last year, down from 100 percent in 2019. 

The [rare earths] that they placed on the list are the ones that we really don’t make in the United States, that have to be processed in China. It’s very strategic.

Mahnaz Khan, vice president for critical supply chains policy at Silverado Policy Accelerator

The extent of U.S. reliance on China for the seven rare earths named in the latest round of Chinese restrictions is harder to gauge exactly. China accounts for 93 percent of the country’s annual consumption of yttrium, according to the USGS. The department does not give separate figures for the other elements, although its figures show that overall, Chinese supply meets 56 percent of annual U.S. demand for rare earths compounds and metals.  

Without certain rare earths, manufacturers in sectors from defense to semiconductors to automotive manufacturing may be unable to make their products, or might have to resort to alternative, lower-performing components.

The U.S. doesn’t yet domestically produce the bulk of the rare earths in the most recent set of Chinese export controls, says Mahnaz Khan, vice president for critical supply chains policy at Silverado Policy Accelerator, a think tank in Washington. 

“The ones that they placed on the list are the ones that we really don’t make in the United States, that have to be processed in China,” she says. “It’s very strategic.”

American stealth fighter jets, for example, rely on now-controlled rare earths including dysprosium and terbium, according to commodities consultancy SFA Oxford.

“This is a precision strike by China against Pentagon supply chains,” said Mark Smith, CEO of critical minerals developer NioCorp, in a press release. “With this new move, Beijing is jamming its fingers on the pressure points of American deterrence.” 

The Department of Defense declined to comment.

Others say the U.S. is unlikely to face major shortages of the rare earths in question. Eugene Gholz, a professor at the University of Notre Dame who previously advised the Pentagon on manufacturing policy, says there should be ample supply of the seven minerals on global markets because significant trade in rare earths happens outside Chinese government control. “Much of it is illicit and smuggled,” he says.

The United States was not always so dependent on China — or any other country — for rare earth materials. From the 1960s through the early 1990s, the U.S. ruled the global rare earth roost. 

Then came a production boom in China, backed by Beijing. Deng Xiaoping, China’s leader throughout the 1980s, once said “the Middle East has oil, and China has rare earths.” 

A breakdown of a generic smartphone into its constituent parts illustrates how important rare earths have become to key modern technologies.

Gholz says that most rare earths enter the United States as intermediary or finished products involving global supply chains, and that these goods may fall outside the bounds of export controls. That could make Trump’s global tariffs potentially more punishing for the U.S. supply of goods containing rare earths than Chinese export restrictions. 

“Not only do other countries turn rare earths into a magnet, but they put the magnet into a motor before they ship it to the United States,” he says. “Even a tariff on small electric motors could have a bigger effect on goods containing rare earths than Chinese rare earth export controls.”

Enforcement is another open question. China’s Nonferrous Metals Industry Association said the controls would not affect the “stability and security of the international industrial and supply chain” as long as companies “do not engage in activities that undermine China’s national sovereignty, security, and development interests.”

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