Rare Earths, Real Power: The U.S.-China Struggle Over Rare Earths: Beijing Imposes New Restrictions.

• The intensifying rare earth standoff between the United States and China is no longer a background issue for materials science specialists or niche energy analysts.

• It is now front and center in the emerging architecture of global economic conflict.

• This week, President Trump launched a new national security investigation aimed at imposing tariffs on critical minerals-directly targeting China’s near-monopoly on the processing of rare earth elements (REEs).

• The move comes in response to China’s own export restrictions on heavy rare earths, which Beijing has paired with increasingly explicit geopolitical messaging.

• And this is not simply an economic dispute.

• It is a contest over who controls the material base of the next century’s great power technologies: autonomy, deterrence, and economic leverage are all on the line.

“Benevolence” with Leverage: Xi Jinping’s Southeast Asia Tour as Strategic Theater.

• As Trump ramps up U.S. economic pressure, Xi Jinping is walking red carpets in Hanoi and Kuala Lumpur.

• In Vietnam, the Chinese leader portrayed Beijing as a reliable regional partner committed to “connecting instead of decoupling.”

• Naturally, this is no altruism - it is hedging.

• Xi is leveraging China’s dominance in rare earth processing to both punish Washington and offer carrots to Southeast Asian nations-many of which possess substantial rare earth reserves but lack domestic refining capacity.

• Beijing is positioning itself as both gatekeeper and patron, signaling: “If you want your rare earths processed, look no further than China.”

Strategic Facts You Cannot Ignore:

• China refines nearly 100% of the world’s heavy rare earths, even though it only mines ~70% of the global supply.

• The U.S. imports over 70% of its rare earth elements from China, with no commercial-scale refining capacity at home.

• Mountain Pass mine in California-the only operational rare earth mine in North America—supplies ~15% of global rare earth oxide raw output. But those materials are still sent to China for refining.

• (side note: this is in spite of Mountain Pass mine having access to their own processing facilities. But China’s low prices meant that it was simply uneconomical to process them here in the U.S. So there is some logic to imposing tariffs on REEs so that their prices are higher and it is now economical to invest into processing in the U.S. Of course details matter. And these tariffs would need to be gradual and precise and come with added incentives to build processing here.)

• Heavy rare earths targeted in the Chinese export restrictions include:

  • Terbium – for green phosphors and high-strength magnets

  • Dysprosium – for permanent magnets in EVs and missile systems

  • Samarium – for guidance systems and military-grade magnets

  • Yttrium, Gadolinium, Lutetium – used in lasers, nuclear control rods, MRI equipment, and optical applications

• This isn’t just about inputs for smartphones.

• It’s about what powers the F-35, Patriot missiles, radars, and hypersonic deterrents.

Licensing as Leverage: The Chinese Export Control Playbook.

China has not yet enacted a full ban on all exports of REEs to the U.S. Instead, it’s using export licensing as a flexible, opaque, and powerful instrument of statecraft:

1. Delays: New export licenses introduce processing lags, disrupting just-in-time supply chains.

2. Discretion: Beijing can selectively approve or deny applications—rewarding allies and punishing rivals.

3. Escalation potential: As trade tensions escalate, licenses could be revoked or reduced—turning the tap off entirely.

Beijing’s Targeted Escalation: The 15-Firm Blacklist.