America’s advanced weapons manufacturers are likely to face a critical shortfall of key rare-earth minerals that they import from China as a consequence of Donald Trump’s escalating trade war with Beijing.
New export licensing restrictions imposed by China on seven rare earths are like to cause disruptions in supply to more than a dozen US defence and aerospace companies involved in the production of everything from fighter jets to submarines and drones, the Center for Strategic and International Studies said in a commentary.
The warning from CSIS was echoed in an expert opinion from the UK thinktank Chatham House, which said any further tightening of Chinese restrictions “has the potential to do serious damage to the US defence industry and undermine the Trump administration’s wider re-industrialisation ambitions”.
Chatham House said: “Ultimately, this could give Beijing a crucial strategic advantage in long-term US-China competition for military and technological supremacy and add to its existing manufacturing lead.”
The issue of rare earths has rapidly emerged as a significant achilles heel in Trump’s trade war with Beijing. The minerals covered by Chinese restrictions – samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium – are seven of the 17 rare earths in the periodic table.
While China has not outright banned export of the minerals, it has pointedly imposed licensing restrictions, in an echo of a similar dispute with Japan in 2012 when the price of rare earths increased tenfold.
The rare earths have a variety of industrial uses, including military uses, not least in the production of hi-tech magnets used in modern motors including electric vehicles.
China mines 70% of the world’s rare earths and processes 90% of the global supply, a situation that had long suited western customers because of the environmental issues associated with production – with no rare earth production taking place in the US at present.
The US has sought alternative supplies, including from Ukraine and potentially Greenland, driving two of the Trump administration’s most ham-fisted foreign policies: seeking to trade rare earths for an end to the war in Ukraine, and to control the Danish autonomous territory.
The minerals are used in a number of key US defence systems including F-35 fighter jets, Virginia- and Columbia-class submarines, Tomahawk missiles, radar systems, Predator unmanned aerial vehicles and the Joint Direct Attack Munition series of smart bombs.
The CSIS said the Chinese moves should have been entirely predictable amid warnings over US vulnerability to restrictions on supplies.
It said: “A number of policies have foreshadowed that export restrictions were on the horizon. China first weaponised rare earths in 2010 when it banned exports to Japan over a fishing trawler dispute. Between 2023 and 2025, China began imposing export restrictions of strategic materials to the United States, including gallium, germanium, antimony, graphite and tungsten.”
Commenting on China’s leverage over the issue of rare earths, William Matthews, a research fellow in Chatham House’s Asia Pacific programme, said: “This gives China a stranglehold over inputs into supply chains that are crucial to American primacy, from semiconductors to aircraft.
“China is leveraging its core role in supply chains from which the US has sought to exclude it, most notably semiconductors. The move sends a message: while the US might attempt to cut China off from the most advanced chips and other cutting-edge technologies, China could go one step further by cutting off the supply chain upstream.”
Matthews said one long-term risk for the US in a protracted trade war was that America and China were in the midst of a race to produce “sixth-generation” fighter aircraft, including the proposed US F-47 recently unveiled by Trump, giving China the advantage as it pursued its own production.
Any Chinese advantage in advanced military aircraft production, which the US has historically dominated, would be likely to feed into military tensions.
Vulnerabilities in rare-earth minerals supply have also long been acknowledged in civilian manufacturing, with Elon Musk’s Tesla aiming to reduce the rare earths used in its electric vehicles by 25% in recent years.
“This is not new, it’s been known about for over a decade,” Patrick Schröder, a researcher in global trade and the environment at Chatham House, said. “It has been flagged repeatedly. Lots of hi-tech industries can’t really manufacture much without rare earths.
“The reason China [has cornered the market in rare earths] is that production is often a very polluting and destructive process. For other countries it was fine for China to have that pollution. Which is fine as long as trade works and geopolitics doesn’t get in the way. Now all that’s changed.”
