China’s Rare Earth Controls Could Stunt Other Countries’ Progress

China’s Commerce Ministry has announced that, starting Dec. 1, foreign companies will be required to obtain a license to export products containing more than 0.1% rare earths from China, or products made using Chinese production technology.

Ironically, the U.S. once pioneered rare earth metals processing but sold the technology to China decades ago, abandoning what could have been a lasting monopoly. (Photo: N509FZ Wikimedia Commons)

The move prompted President Donald Trump to announce that he would impose an additional 100% tariff on China and restrict U.S. exports of software, Jason Ma reported for Fortune.

While the development appeared to be the latest tit-for-tat in the U.S.-China trade war, analysts say the implications are far broader.

“We should not miss the fundamental point on rare earths: China has crafted a policy that gives it the power to forbid any country on Earth from participating in the modern economy,” Dean Ball, who served as a senior advisor in the White House Office of Science and Technology Policy earlier this year, wrote on X on Saturday.

“They can do this because they diligently built industrial capacity no one else had the fortitude to build. They were willing to tolerate costs—financial, environmental, and otherwise—to do it. Now the rest of the world must do the same,” Ball argued.

China produces more than 90% of the world’s rare earths and rare earth magnets, which are used across industries—from technology to automotive manufacturing to defense.

They are so critical that U.S. carmakers have reduced production due to shortages, as China has leveraged supply constraints to counter Trump’s tariffs.

Ironically, the U.S. once pioneered rare earth metals processing but sold the technology to China decades ago, abandoning what could have been a lasting monopoly.