Key Facts
• Rare earths, vital for EVs and tech, are heavily sourced from China.
• China imposed export restrictions on 7 rare earth elements in April 2025.
• Restricted elements include terbium, dysprosium, samarium, gadolinium, lutetium, scandium, and yttrium.
• China supplies 70% of global rare earths, dominating refining and processing.
• US-China tensions led to a May 2025 Geneva agreement to cut tariffs by 115%.
• Ford’s Chicago plant halted SUV production due to rare earth shortages in May 2025.
• European auto parts factories report only 25% of export permits approved by China.
• Suzuki’s Swift production in Japan stopped due to rare earth supply delays.
• Experts suggest China uses export permits to influence US, Europe, and Japan relations.
• Rare earth cooperation is a key focus in US-Japan trade talks for supply chain security.
Summary
The US-China rare earth dispute has escalated, with China imposing export restrictions on seven critical elements, affecting global supply chains. These materials, essential for electric vehicles and high-tech products, are predominantly sourced and processed in China, which controls 70% of the market. The restrictions have disrupted production in the US, Europe, and Japan, with companies like Ford and Suzuki halting operations due to shortages. In May 2025, the US and China agreed to reduce tariffs, but tensions remain as export permits are delayed. Experts believe China is leveraging its dominance to influence geopolitical relations. The issue has become a focal point in US-Japan trade talks, emphasizing the need for alternative supply chains and technological cooperation to reduce dependency on China.
