{"id":69207,"date":"2025-10-16T11:40:35","date_gmt":"2025-10-16T06:10:35","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=69207"},"modified":"2025-10-16T11:41:55","modified_gmt":"2025-10-16T06:11:55","slug":"rare-earths-the-new-flashpoint-in-the-us-china-trade-war","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/rare-earths-the-new-flashpoint-in-the-us-china-trade-war\/","title":{"rendered":"Rare Earths: The New Flashpoint in the US-China Trade War"},"content":{"rendered":"<h2><b>Rare Earths Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The ongoing China\u2013US trade conflict has intensified over rare earth minerals, a critical component for high-tech industries.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">China recently tightened restrictions on rare earth exports, prompting US President Donald Trump to threaten 100% tariffs in retaliation.<\/span><\/li>\n<\/ul>\n<h2><b>Rare Earths: Abundant in Nature, Critical in Technology, and Dominated by China<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rare earths refer to 17 metallic elements \u2014 from lanthanum (57) to lutetium (71), plus scandium (21) and yttrium (39) \u2014 known for their high density, conductivity, and thermal resistance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">They are divided into light and heavy rare earths, based on atomic weight, and form an essential subset of critical minerals vital to modern industries.<\/span><\/li>\n<\/ul>\n<h3><b>Why They Matter<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These elements are indispensable, even in trace quantities, for a wide array of technologies \u2014 <\/span><span style=\"font-weight: 400;\">from smartphones, wind turbines, and electric vehicles to weapons systems, robotics, MRI scanners, and cancer treatment equipment<\/span><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Their unique properties make them irreplaceable components in both civilian and defence applications, underpinning the global clean energy and digital revolutions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rare earths typically occur in low concentrations, making extraction and refining expensive and environmentally complex.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This high cost limits the number of countries that can profitably mine and process them.<\/span><\/li>\n<\/ul>\n<h3><b>China\u2019s Global Dominance<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">According to the International Energy Agency (IEA):<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Over 60% of rare earth mining occurs in China.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">More than 90% of global processing and refining capacity is also controlled by Beijing.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This near-monopoly gives China strategic leverage in global supply chains, making rare earths a central weapon in trade and geopolitical rivalries, especially with the United States.<\/span><\/li>\n<\/ul>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-69225\" src=\"https:\/\/d35xcwcl37xo08.cloudfront.net\/current-affairs-wp-uploads\/2025\/10\/unnamed-2025-10-16T110218.180.webp\" alt=\"\" width=\"504\" height=\"512\" \/><\/p>\n<h3><b>Global Reserves, Limited Production<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While <\/span><b>Brazil, Australia, and India hold substantial rare earth reserves<\/b><span style=\"font-weight: 400;\">, their production remains minimal.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The reasons include:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Low economic viability due to high extraction costs, and<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Environmental concerns, as rare earth mining is highly polluting and requires complex waste management systems.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b>China\u2019s Rare Earth Dominance: Weaponising Trade Through Rare Earths<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Beijing has pursued a deliberate industrial strategy to achieve near-total control over the mining and processing of these critical minerals, integrating them into its long-term economic and geopolitical planning.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">China\u2019s export restrictions, particularly on heavy rare earths like terbium (65) and dysprosium (66) \u2014 essential for defence and high-tech manufacturing \u2014 are part of a policy to use rare earths as a strategic trade weapon.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In response to US tariffs under President Donald Trump, Beijing has used its dominance in rare earths to gain leverage and escalation control in the ongoing US-China trade war.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">China\u2019s decades-long investment in rare earth mining, refining, and technology has created a <\/span><b>complete supply chain monopoly<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2><b>New Restrictions on Rare Earth Exports and Impact on India<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">China has expanded its export control list to include <\/span><b>five additional rare earth elements<\/b><span style=\"font-weight: 400;\"> \u2014 holmium, erbium, thulium, europium, and ytterbium \u2014 along with related magnets and materials, bringing the total number of restricted elements to 12.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>Ministry of Commerce<\/b><span style=\"font-weight: 400;\"> also added <\/span><b>refining technologies<\/b><span style=\"font-weight: 400;\"> to the control list and announced that <\/span><b>foreign producers using Chinese rare earths<\/b><span style=\"font-weight: 400;\"> must now comply with its new export rules.<\/span><\/li>\n<\/ul>\n<h3><b>Limited Impact on India\u2014for Now<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s exposure to rare earth supply disruptions is relatively limited, owing to low domestic consumption.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">According to the Ministry of Mines, <\/span><b>India imported 2,270 tonnes of rare earth elements in 2023\u201324<\/b><span style=\"font-weight: 400;\">, up 23% from 2019\u201320, with 65% sourced from China and 10% from Hong Kong.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The auto sector (particularly EVs) and the electronics industry have felt the sharpest impact from earlier Chinese restrictions in April.<\/span><\/li>\n<\/ul>\n<h2><b>India\u2019s Domestic Initiatives and Future Plans<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s rare earth production remains modest, led by state-owned IREL Ltd, which operates a processing unit with a capacity of over <\/span><b>10,000 tonnes per annum<\/b><span style=\"font-weight: 400;\">, compared to China\u2019s 200,000 tonnes in 2023.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, India is actively expanding its footprint:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Seven seabed blocks in the Andaman<\/b> <b>Sea <\/b><span style=\"font-weight: 400;\">have been auctioned for exploration and mining of polymetallic nodules and crusts that may contain heavy rare earths.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The Department of Atomic Energy has cleared plans for a <\/span><b>Rare Earths Theme Park<\/b><span style=\"font-weight: 400;\"> to establish pilot plants across the value chain.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Two major projects \u2014 the <\/span><b>Rare Earth Permanent Magnet Park in Visakhapatnam<\/b><span style=\"font-weight: 400;\"> and the <\/span><b>Rare Earth and Titanium Theme Park<\/b><span style=\"font-weight: 400;\"> in Bhopal \u2014 are being developed with central funding to strengthen India\u2019s presence in this strategic sector.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b>Global Shifts Beyond China<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Globally, efforts to diversify the rare earth supply chain are gaining traction:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The <\/span><b>US is preparing an executive order<\/b><span style=\"font-weight: 400;\"> to stockpile deep-sea metals from the Pacific seabed, reducing reliance on China for battery minerals and rare earths.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Japan<\/b><span style=\"font-weight: 400;\">, which faced Chinese curbs in the early 2010s, has since rebuilt its rare earth supply chains, offering a potential model for India and Western economies seeking independence from Beijing\u2019s control.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b>Source:<\/b> <strong><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/rare-earths-china-us-trade-10309021\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a> | <a href=\"https:\/\/www.indiatoday.in\/diu\/story\/why-rare-earths-are-the-new-gold-in-geopolitics-2802489-2025-10-13\" target=\"_blank\" rel=\"nofollow noopener\">IT<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>China\u2019s new rare earth export curbs spark US tariff threats, deepening trade tensions. India eyes domestic expansion to cut import dependence and join global supply chains.<\/p>\n","protected":false},"author":18,"featured_media":69224,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,3277,22,59],"class_list":{"0":"post-69207","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-articles","9":"tag-rare-rarths","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/69207","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=69207"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/69207\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/69224"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=69207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=69207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=69207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}