{"id":43511,"date":"2025-10-29T14:54:04","date_gmt":"2025-10-29T06:54:04","guid":{"rendered":"https:\/\/www.phillipnova.com.sg\/?post_type=market_trends&p=43511"},"modified":"2025-10-29T15:17:45","modified_gmt":"2025-10-29T07:17:45","slug":"rare-earths-a-strategic-weapon-in-the-trade-tensions","status":"publish","type":"market_trends","link":"https:\/\/www.phillipnova.com.sg\/cn\/market_trends\/rare-earths-a-strategic-weapon-in-the-trade-tensions\/","title":{"rendered":"Rare Earths A Strategic Weapon In The Trade Tensions"},"content":{"rendered":"
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China has sharply escalated its rare earth export controls ahead of President Donald Trump\u2019s upcoming visit to South Korea, where he\u2019s expected to meet Chinese President Xi Jinping. The move\u2014Beijing\u2019s toughest yet\u2014applies strict new licensing requirements on the export of rare earths and permanent magnets, extending even to products made overseas that use Chinese-origin materials or technology. Given China\u2019s near-total dominance in the rare earth supply chain, the new rules could have far-reaching implications for global defense and semiconductor industries.<\/p>\n

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After Beijing announced new controls on foreign-made products containing Chinese rare earths, Donald Trump threatened to impose an additional 100% tariff as soon as November 1. Beijing’s restrictions are widely seen as a retaliatory measure<\/strong> in response to U.S. tariffs and export controls (especially from the Donald Trump administration) on Chinese goods and technologies. These moves raised market concerns about supply-chain disruptions, especially in sectors like materials\/rare earths and semiconductors.\u00a0<\/p>\n

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Under the new policy, any foreign company using Chinese rare earths, mining technology, or magnet-making processes must obtain Chinese government approval before export. Licenses will likely be denied for any entity tied to foreign militaries, effectively cutting off U.S. and allied defense supply chains from Chinese inputs. The restrictions also introduce case-by-case reviews for advanced technology applications\u2014such as sub-14nm semiconductors\u2014giving Beijing new leverage to slow or block exports critical to Western industries.<\/p>\n

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China also moved to prevent the outflow of its expertise, barring nationals from engaging in overseas rare earth or magnet projects without authorization. While Beijing says it remains open to dialogue on \u201ccompliant trade,\u201d the timing and scope of the restrictions suggest they are a negotiation tactic ahead of Trump\u2013Xi talks, reinforcing China\u2019s dominance and influence in global supply chains.<\/p>\n

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For the U.S., the measures highlight a growing vulnerability. Despite recent efforts to rebuild domestic capacity\u2014such as the Department of War\u2019s $400 million investment in MP Materials and a new partnership between Noveon Magnetics and Lynas Rare Earths\u2014China still controls the vast majority of global production and processing. It will take years before U.S. supply chains can meaningfully reduce dependence on Chinese rare earths, leaving Washington exposed as Beijing turns these resources into a strategic bargaining chip in the escalating economic rivalry.<\/p>\n

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Some tech sector and rare earths sector stocks to watch<\/h3>\n
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  1. NVDA (NVIDIA Corporation)<\/strong> \u2013 A leading GPU\/AI semiconductor company; any easing of U.S.\u2013China tech export tensions could help.

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  2. QCOM (Qualcomm, Inc.)<\/strong> \u2013 Strong China exposure (smartphones, wireless) and trade policy changes could affect it.

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  3. MU (Micron Technology, Inc.)<\/strong> \u2013 Memory\/chip maker whose growth is tied to global demand and supply-chain \/ export control factors.\u00a0

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  4. ASML (ASML Holding N.V.)<\/strong> \u2013 Critical supplier of chip-making equipment; export controls (especially to\/from China) matter a lot here.

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  5. MP (MP Materials Corp.)<\/strong> \u2013 One of the major non-Chinese rare earth producers (mine + refining) in North America.\u00a0

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  6. USAR (USA Rare Earth, Inc.)<\/strong> \u2013 A smaller, more speculative play in \u201cmine-to-magnet\u201d rare earths, which could benefit from supply-chain shifts.\u00a0<\/li>\n<\/ol>\n

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