Believe it or not, China has unveiled a secret weapon in its economic standoff with the United States. According to Bloomberg, that weapon is rare earth metals. Restricting their export could deal a heavy blow to the American economy.
The Chinese government's decision to limit the export of certain rare earth elements has emerged as a major tactic in the ongoing trade war with the United States. The battle of the economic giants has officially begun.
The new export controls apply to seven rare earth elements. Analysts warn that these restrictions could significantly disrupt supply chains vital to high-tech industries. If the conflict escalates, experts fear a potential global crisis, with key sectors, such as electric vehicle manufacturing and defense, facing severe shortages.
At present, China is the world’s dominant supplier of rare earth elements, exporting 17 strategic elements from the periodic table. The country accounts for roughly 70% of global production. Beijing is well aware of this strategic advantage and has already used it in past trade disputes with Washington. Current restrictions already target gallium, germanium, graphite, and antimony. Expanding this list would further strengthen China's hand in the escalating tariff war.
It is worth recalling that in March, US President Donald Trump doubled tariffs on Chinese imports, raising them from 10% to 20%. In early April, he approved a new round of 34% tariffs. Beijing responded in kind, matching the tariffs on all US goods. Additionally, China imposed new investment restrictions targeting the US economy.
Experts agree that no one wins in this kind of economic showdown. According to estimates, the United States could face annual losses of $55.6 billion if the trade war continues.
