Key Facts
• China announced investigation into semiconductor manufacturing gases imported from Japan.
• This follows China’s export restrictions on rare earths affecting Japan.
• In 2024, China accounted for 71.9% of Japan’s rare earth imports.
• Rare earths are critical for smartphones and fighter jets worldwide.
• Japan’s Chief Cabinet Secretary Minoru Kihara condemned China’s measures as unfair.
• Nitori Holdings Chairman Akio Nitori noted potential impacts on factories using rare earths.
• Major Japanese auto parts makers expressed concern over industry-wide effects.
• On January 7, China’s ambassador to Japan was absent from a Japan-China economic event.
• Commerce Minister Luo Xiaomei described the current situation as the toughest since normalization of relations.
• China demands retraction of Prime Minister Sanae Takaichi’s Taiwan remarks.
• China also launched a dumping investigation on Japanese semiconductor raw materials.
• If dumping is confirmed, additional tariffs may be imposed.
Summary
China has escalated trade tensions with Japan by expanding its scrutiny from rare earth exports to semiconductor manufacturing gases imported from Japan. Rare earths, essential for various high-tech and defense products, represent a significant import source for Japan, with China supplying nearly 72% in 2024. Japanese officials and industry leaders have voiced serious concerns about the impact of China’s export restrictions and investigations. The diplomatic strain is underscored by the absence of China’s ambassador at a key economic meeting and strong language from Chinese officials describing the situation as unprecedentedly severe. Additionally, China’s dumping probe into Japanese semiconductor materials signals potential for further trade barriers, including tariffs, intensifying the ongoing Japan-China economic friction amid geopolitical disputes over Taiwan.
