RARE EARTH WEDGE: HOW SUPPLY CHAINS BECAME A BATTLEGROUND OF U.S.-CHINA TARIFFS

A chronological and detailed overview of how rare earths have become a wedge in the U.S.-China tariff conflict, placing recent developments in the context of decades of industrial policy and geopolitical rivalry.

- TDG NETWORK

In October 2025 Beijing announced a fresh set of export controls that required foreign companies to secure a license if their products contained more than 0.1% of rare-earth elements or were made with Chinese technology.

The rules effectively extended China’s foreign direct product rule—often used by Washington against Chinese firms—to the rare-earth sector. Within hours U.S. president Donald Trump retaliated by threatening a 100% tariff on all Chinese imports and additional export controls on critical U.S. software. China called the tariffs hypocritical and defended its controls, arguing that they were motivated by concerns about military use and that civilian users would be granted licenses. Fortune magazine quoted a former White House adviser who warned that Beijing now has the power to “forbid any country on Earth from participating in the modern economy”, while other analysts noted that U.S. car makers had already cut production because of rare-earth shortages.

The flareup is more than a tit-for-tat exchange. It marks a turning point in a decades-long geopolitical struggle that has unfolded through tariffs, export quotas, investment, and industrial policy. Rare earths—seventeen elements that underpin everything from smartphones and wind turbines to F-35 fighter jets—have become a wedge issue in the U.S.-China relationship. This article traces the chronology of that struggle, demonstrating how the current crisis echoes earlier episodes and shows an emerging theme: the weaponization of supply chains. What began as a contest over tariffs has become a broader race to control the inputs of a modern economy.