China demands data, Washington stalls

China cut off exports of seven rare earth minerals and the high-powered magnets made from them, targeting global industries that rely on these materials to operate.

These minerals power missiles, fighter jets, drones, submarines, electric vehicles, data centres, wind turbines, and the entire clean energy transition. By halting their flow, China used minerals like weapons and exposed just how deep American and global dependence runs.

The United States has seen this coming for nearly two decades. Everyone in Washington, from Democrats to Republicans, has known the supply chain for these elements is too fragile and too tied to Beijing’s control.

And still, administration after administration failed to do much more than write memos and hold forums. Now, the impact is immediate and concrete. Manufacturing delays. Defense complications. Supply chain chaos. The US is vulnerable, and China just reminded everyone.

China demands data, Washington stalls

After high-level trade talks in London, Beijing said it would resume granting rare earth export licenses—but only for the next six months. No one in Washington has explained what was traded to get that deal. And the White House hasn’t answered what happens when the six months end. Officials call the arrangement a success, but the terms remain secret.

In the meantime, companies are already feeling the damage. Ford shut down its Chicago factory because it ran out of magnets. The pause in production is a direct result of the supply freeze. It’s not theoretical. It’s happening. US officials might be calling it a diplomatic win, but it doesn’t solve the basic problem: there’s no trust, no transparency, and no long-term certainty.

And the so-called “reprieve” isn’t even clean. Multiple European and North American firms say the Chinese export license process forces them to hand over internal data. Production specs. End-use documentation. Customer names. Facility photos. Even past transactions.

When companies pushed back, some were denied licenses for not submitting images of their end users. Industry leaders are calling it “official information extraction,” accusing China of harvesting trade secrets through bureaucracy.

For defense contractors, that’s an intelligence risk. If a company skips a detail, it faces endless delays. But if it shares too much, it hands over valuable info that could be used to undercut US pricing or replicate American technologies. And for military-linked businesses, there’s no relief at all. The license deal doesn’t apply to them. They’re locked out completely.

US failure spans three presidencies

None of this came out of nowhere. In 2010, China stopped exporting rare earths to Japan during a maritime spat. That was the warning. In 2014, Barack Obama’s administration won a WTO case against China’s export limits, but wrongly assumed that legal pressure alone would stop future manipulation. It didn’t.

During Donald Trump’s first term, his trade team flagged rare earths as critical, but didn’t include them in the 2018 China tariffs. That was a silent admission that the US couldn’t afford to lose them. Joe Biden tried a more organized approach: Executive Order 14017, the Critical Minerals Working Group, federal funds from the IIJA and IRA, and diplomatic efforts like the Minerals Security Partnership. But progress was painfully slow. Permits got stuck. Allies hesitated. Projects stalled.

Now back in the White House, Trump is pushing harder. He’s used Section 232 to elevate the issue, activated the Defense Production Act, and proposed sharp budget increases in his 2026 proposal. His team created a National Energy Dominance Council to manage coordination. Still, China holds most of the cards. Defense industries are still blocked from access. The core problem hasn’t changed.

Outside the US, others are sounding the alarm. At the G7 summit in Canada, European Commission President Ursula von der Leyen directly accused China of “weaponizing” its control of rare earths and said the world needs a united front. The G7 unveiled a new Critical Minerals Action Plan to increase recycling, set new sourcing standards, and co-invest in refining and substitution tech.

China’s reaction? Immediate and furious. Its foreign ministry called the plan “a pretext for protectionism,” and warned that the G7 was trying to isolate Beijing to keep control of global trade. At the same time, the EU says trade talks with China are going nowhere, and retaliation could be coming soon. If China responds, it may accidentally push Europe, India, South Korea, and Japan closer to Washington.

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