Four things to know about Beijing's rare earth bomb

Copyright © HT Digital Streams Limit all rights reserved. Stu Woo, Jon Emont, The Wall Street Journal 3 Min Read 11 Oct 2025, 01:02 PM is a laborer work on the site of a rare earth-metal mine in Nancheng County, Jiangxi Province. Reuters/Stringer/File Photo (Reuters) summary before a possible meeting between President Trump and Chinese leader Xi Jinping, Beijing dropped a bomb shot: China further limited access to the indispensable technical material. A laborer works on the grounds of a rare earth-metal mine in the Jiangxi Province, China. Prior to a possible meeting between President Trump and Chinese leader Xi Jinping, Beijing dropped a bomb shot: China further limited access to the supplies that American businesses needed for computer chips, cars and other technology. The move gives China leverage before the expected trade conversations with Washington. Here’s what to know. What supplies have China limited, and why is it important? It is called rare earth, which are elements in the ground. Although not actually rare, it is difficult to withdraw because they are spread and mixed between other rocks and minerals. Few places have a rich concentration of the most sought after rare earth. One such area is South China, part of the reason why the country produces about 90% of the world’s rare earth. One of the most critical rare earth is disprosium, atom number 66 on the periodic table. If the technology industry was a bakery, dysprosium would be like baking powder: it is used in small quantities, but essential to enable electric cars, wind turbines, military systems and computer machinery. What exactly did China do? The Ministry of Trade in China on Thursday expanded previous export control by adding a seemingly darling requirement: Any company – in China or abroad – should be given Chinese permission to export certain products that acquire more than 0.1% of their value of a rare earth. The ministry also expanded the list of rare earth and banned their exports for use by foreign military countries. Meanwhile, China on Friday targeted other US interests by setting up port on US ships and opening an antitrust investigation into Qualcomm. It is all part of Beijing’s campaign to fight back against Washington’s own trade ties. What businesses will be affected? It depends on which products are affected, and the rules are not clear. They may just target rare earth materials and rare earth magnets, or they can hit a variety of parts and components that have some rare earth. The ambiguity can be purposeful to give the Chinese side bend during negotiations with US most finished consumer goods, such as laptops and smartphones, will probably not have the threshold, said research firm Capital Economics, but interim goods like cars can exceed it. China said it would be particularly investigated into the execution of the limited items if intended to build advanced chips or to support artificial intelligence research. Earlier restrictions of rare earth have already hit car manufacturers such as Ford, and the target of AI and semiconductors were a reminder that China was trying to combat US AI chill leader Nvidia. Some analysts believe the new rules indicate that companies with military as well as civil enterprises, such as Boeing, can be denied access to rare earth for even civil purposes. Will China go through with it – and what can the US do? Many analysts believe the new restrictions are a negotiating tactic by Beijing before trade conversations, but it is likely to retain some rare earth in the long run. In response, Trump said he would impose 100% rates on China by November 1 and suggested that he may sniff XI at a conference in South Korea this month, when they are supposed to meet. The US also has leverage over China because it produces slides needed for the processing of artificial intelligence and industrial products such as ray cars that Beijing has not yet mastered. The US is building its own rare Earth magnetic supply chain. Trump has suggested that the US may stop importing Chinese rare earth. Rare-earth deposits are available outside China, but it will take years to fit China’s mining and processing infrastructure. Write to Stu Woo at [email protected] and Jon Emont at [email protected], catch all the industry news, bank news and updates on live currency. Download the Mint News app to get daily market updates. More Topics #China Read Next Story