China retaliates with more curbs on rare earth exports

China fought back against United States President Donald Trump’s reciprocal tariffs Friday by slapping immediate export restrictions on key rare earth elements in a move that could potentially endanger the supply of critical minerals to U.S. and Western companies.

Seven categories of medium and heavy rare earths, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium-related items, will be placed on an export control list as of Friday, the Chinese government said. Exports to all countries are affected.

China’s announcement shows a willingness to leverage its dominant position in the mining and refining of elements that are used in industries such as defense, electric vehicle, clean energy and electronics. Asia’s most populous country produces about 90% of the world’s refined rare earths, while most U.S. imports come from China.

News of the Chinese export controls “highlights the urgent need for a robust and independent rare earth supply chain in North America,” Ucore Rare Metals (TSXV: UCU; OTC-UURAF) CEO Pat Ryan said Friday in a statement. Halifax-based Ucore is developing the Bokan-Dotson Ridge rare earth element project in Alaska and building a heavy and light rare-earth processing plant in Louisiana.

Rare earth elements are a group of 17 metals — such as cerium, lanthanum, lutetium, ytterbium and yttrium — that are considered critical ingredients for the energy transition.

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China’s latest move follows the introduction in February of a smaller set of retaliatory measures, which included export curbs on five critical metals — tungsten, tellurium, bismuth, indium and molybdenum. China also prohibited non-state companies from mining rare earths in the country.

Other Chinese restrictions in recent years have targeted gallium, which is used in semiconductors and electronic devices; germanium for fibre and infrared optics; antimony found in flame retardants and lead-acid batteries; and graphite, which is used in lithium-ion batteries and fuel cells.

The latest round of export controls came as China slapped a 34% tariff on U.S. imports in retribution for global duties unveiled Wednesday by the White House. When new reciprocal levies of 34% are factored in, China-made goods now face combined U.S. tariffs of 54%.

Beijing also lodged a formal complaint against the U.S. with the World Trade Organization, various news services reported.

Analysts including JPMorgan and Fitch Ratings have warned that Wednesday’s move by Washington could cause a global recession. Major stock markets plunged by more than 4% Thursday and were down again Friday by a similar amount.