In a bold trade maneuver, China has imposed a 34% tariff on U.S. imports and restricted the export of rare earth elements, escalating tensions that could destabilize key American industries. Among the hardest-hit sectors: electric vehicles (EVs), consumer electronics, and renewable energy.
China’s rare earth materials—dysprosium, terbium, and scandium—are critical to manufacturing magnets used in EV motors, solar panels, and defense equipment. The new export curbs could send costs soaring for U.S. producers already grappling with inflation and supply chain constraints.
China’s Ministry of Commerce stated that the tariffs were a direct response to “economic coercion” by the U.S. administration, which had earlier levied new duties on Chinese imports. The move also saw major U.S. firms added to China’s “unreliable entities list.”
Tesla, Apple, and several green-tech startups are reportedly assessing contingency plans, including diversifying supply chains or seeking alternative rare earth sources from Australia and Africa.
While both governments have signaled openness to talks, no firm schedule for negotiations has been announced.
