China leverages rare Earth metals in trade tug-of-war with US

China has deployed rare earth metals as a strategic tool in its ongoing trade conflict with the United States.

The move comes after Beijing announced new export restrictions, responding to actions taken by  U.S. President Donald Trump, Caliber.Az reports per foreign media.

The Chinese government revealed it would closely monitor and regulate the export of these critical materials, scrutinising both the buyers and the purpose behind the purchase of rare earth metals.

Notably, the U.S.-China trade conflict has intensified recently, with significant economic and geopolitical ramifications. In April 2025, President Trump imposed a 34% tariff on Chinese imports, citing concerns over China's role in the fentanyl crisis. In retaliation, China enacted reciprocal tariffs and suspended imports of certain U.S. agricultural products, accusing the U.S. of unilateralism and economic bullying. ​

This escalation disrupts global markets, particularly affecting industries like petrochemicals. The trade tensions threaten the U.S.-China petrochemical trade, especially in liquefied petroleum gas (LPG) and ethane, which are crucial for plastic production. ​

The conflict also adversely impacts U.S. exporters. Companies like Pacific Valley Foods have experienced a 70% revenue decline since 2019, primarily due to tariffs and supply chain disruptions.​

 By Aghakazim Guliyev