China Retaliates with Tariffs as Trade Tensions with the U.S. Escalate

China has announced a freeze on exports of seven critical rare earth elements to the United States, marking a significant escalation in the ongoing trade conflict between the two nations. The decision, made public earlier this week, is expected to severely disrupt supply chains essential for electric vehicles, semiconductors, advanced missile technology, and renewable energy systems. Experts view this move as a strategic leverage by China, emphasizing its dominant position in the global rare earth market and highlighting the growing geopolitical significance of these minerals in the 21st century. According to analysts, access to rare earths is increasingly critical for maintaining technological and defense capabilities amidst rising tensions. China's decision comes at a time when both countries are engaged in a complex economic rivalry, leading to concerns over how these supply chain disruptions could impact various industries in the U.S. The ramifications of this halt on exports could further escalate the already strained relations between the two powers.

Chinese scientists have successfully reloaded fresh fuel into the world's first operational thorium molten salt reactor while it continued to run, marking a significant advancement in clean energy technology. This achievement was announced on April 8 during a closed-door meeting at the Chinese Academy of Sciences, according to project lead Xu Hongjie. Located in the Gobi Desert, the experimental reactor generates 2 megawatts of thermal power and utilizes molten salt to transport fuel and maintain heat, with thorium as the radioactive fuel source. Experts view thorium as a safer and more abundant alternative to uranium, theorizing that a single thorium-rich mine in Inner Mongolia could sustain China's energy needs for tens of thousands of years with less radioactive waste, as noted by Guangming Daily. Xu emphasized China’s leadership in nuclear energy innovation, stating, “We now lead the global frontier,” and highlighted the reactor’s potential in contributing to global energy solutions. Construction on the reactor began in 2018, expanding from a small team to over 400 researchers. Future projects include larger thorium reactors and thorium-powered ships, aimed at promoting zero-emission transport.

In a significant escalation of the trade war with the United States, China has halted the export of several critical rare earth elements and magnets, essential for a wide range of industries, including defense and electronics. This development, effective April 14, 2025, affects shipments globally, as the Chinese government drafts new export regulations, according to a report by The New York Times. China produces approximately 90% of the world’s rare earth elements, which are pivotal for manufacturing products from electric vehicles to military equipment. The export controls target seven categories of medium and heavy rare earths, such as samarium and dysprosium, which are vital for various technologies, including electric motors and advanced electronics. This move is viewed as retaliation against heightened tariffs imposed by the US, which currently has only one rare earths mine and heavily relies on imports from China. Industry leaders express concern about potential supply shortages due to delays in the new licensing system for exports. The increasing restrictions underline China’s strategic ability to influence global supply chains amid growing economic tensions.