An opportunity for India as China fights Trump tariffs with curbs on rare earths

China suspended all exports of rare earth elements on Monday, jolting the American tech and defence industries that rely heavily on the critical minerals used in everything from electric vehicles and wind turbines to missiles.

The move targets elements like dysprosium and neodymium—sounding more like cough syrups than linchpins of modern technology—and marks a dramatic escalation in Beijing’s response to US President Donald Trump’s sweeping tariffs.

Although the US has cut its dependence on Chinese rare earths from 80% in 2017 to around 70% today, most global refining is still dominated by China which controls 90% of the processing capacity.

The disruption comes as Washington and New Delhi deepen cooperation on mineral security. In a bipartisan push earlier this year, the Biden administration lifted longstanding sanctions on India’s state-run IREL and the Trump administration followed up with a US-India “Strategic Mineral Recovery” initiative announced during Prime Minister Narendra Modi’s visit to Washington.

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Industry analysts warn that China’s suspension of rare earth exports signals just the opening stage of a major supply chain realignment as the U.S. and its allies rush to secure critical mineral supplies. While recent US-India partnerships seek to boost collaborative mining and refining efforts, they remain unable to meet the needs of high-tech and defense sectors still heavily dependent on Chinese supply chains.

Even the Pentagon relies on Chinese-processed rare earths for key components such as permanent magnets used in F-35 fighter jets, laser targeting systems, and missile guidance — a strategic vulnerability that has jolted the Trump administration into seeking rapid diversification of supply.

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Elon Musk, whose Tesla and SpaceX ventures depend on rare earths for EV motors and rocket systems, responded with cautious optimism. “These materials aren’t rare in nature,” he said, pointing out that deposits exist worldwide — with India holding the fifth-largest reserves. However, China’s near-monopoly on refining, which stands at around 90% of global capacity, remains the real choke point.

The Chinese export ban, long foreshadowed, has left US manufacturers scrambling for alternatives, further straining relations between the world’s top two economies.

China has suspended exports of a wide range of rare earth metals and magnets, dealing a fresh blow to global supply chains as part of its response to US President Donald Trump’s tariff hikes that took effect on April 2.

The move tightens Beijing’s grip on critical materials vital to electric vehicles, semiconductors, aerospace and defence manufacturing. With nearly total control over global processing—especially in hubs like Longnan and Ganzhou in Jiangxi Province—China’s rare earth dominance is now being wielded as strategic leverage. Key suppliers such as JL Mag Rare-Earth Company have long fueled industries worldwide, including automakers like Tesla and BYD.

The export halt coincides with resumed mining in Jiangxi, where machinery and chemical activity suggest extraction is quietly restarting despite previous environmental concerns. The decision highlights a new phase in the tariff war, as Beijing signals its willingness to weaponise critical raw materials in an intensifying geopolitical contest.