China Tightens Control Over Strategic Minerals Amid US Trade Clash

China's latest export restrictions on key minerals escalate the ongoing US-China trade war, impacting global supply chains.

Editorial Team (ET)July 27, 2025

China has retaliated against the United States’ latest tariff measures by restricting the export of five key minerals—tungsten, tellurium, bismuth, indium, and molybdenum. These metals are crucial for industries ranging from defense to clean energy, further amplifying the ongoing trade war between the world’s two largest economies.

The move comes in response to President Trump’s latest 10% tariff hike on Chinese imports, announced last Friday. The new controls mean companies will require special export licenses to obtain these minerals, though Beijing has remained vague on the exact criteria for approval.

Targeting America’s Weak Points

While the US remains a leading producer of molybdenum, it is heavily reliant on Chinese tungsten and bismuth, both essential for manufacturing high-performance alloys and electronic components. The US stopped mining tungsten in 2015 and has not produced refined bismuth since 1997. These vulnerabilities make Washington’s supply chain increasingly fragile.

For indium and tungsten, American industries have already begun diversifying supply chains in response to prior tariffs. The US Geological Survey (USGS) notes that less than 10% of American indium imports now come from China, with South Korea, Japan, and Canada filling the gap.

China’s Counterattack: Tariffs on Energy and Agriculture

Beijing’s retaliation does not stop at mineral curbs. Starting February 10, China will impose a 15% tariff on US coal and liquefied natural gas (LNG), while raising duties by 10% on American crude oil, agricultural equipment, and select automobiles.

These tariffs strike at the heart of the US economy, targeting energy and manufacturing sectors that have remained central to Trump's economic policies. As trade tensions escalate, supply chains on both sides brace for potential disruptions.

A Trade War With No End in Sight

The latest restrictions mirror past economic battles. Trump’s 2018 trade war against China led to widespread global supply chain disruptions, and despite an agreement in 2020 to increase Chinese purchases of US goods, the deal faltered due to the COVID-19 pandemic. The result? A record-high US trade deficit with China, which hit $361 billion last year.

With a second Trump term in full swing, Washington is now reviewing China’s adherence to past trade deals. The findings, expected by April 1, could determine the next round of tariffs and restrictions.

The Global Impact

This tit-for-tat escalation is more than a bilateral dispute—it’s a battle shaping global markets. The world’s dependence on critical minerals from China, combined with the US’s push to rebuild domestic production, is driving uncertainty in sectors like energy storage, semiconductors, and defense.

As geopolitical tensions rise, investors and industries alike must prepare for further volatility. The world’s two largest economies are locked in a strategic contest, and the outcome will determine the future of global trade for years to come.

China

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