The export controls by China on certain medium and heavy rare earths took effect on 4 April.
In addition to tariffs, China has imposed export restrictions on specific rare earth elements, including dysprosium, gadolinium, lutetium, samarium, scandium, terbium, and yttrium, effective April 4. These materials are vital for industries such as technology and defense. This move builds on earlier Chinese tariffs of 10–15% on certain U.S. agricultural and energy products introduced this year. China has also updated its export control list, adding 16 U.S. entities, including 15 from the defense and aerospace sectors, and the Coalition for a Prosperous America, restricting their access to dual-use items.
Furthermore, 11 U.S. companies have been added to China’s “unreliable entity” list, allowing Beijing to enforce penalties like fines or bans. Among them are Skydio and BRINC Drones, targeted for supplying equipment to Taiwan, a region China regards as part of its territory. Following these developments and Trump’s tariff announcement, the Chinese yuan dropped to its lowest level in seven weeks, and stock markets experienced declines.
The U.S.-China trade tensions trace back to the 2020 “phase 1” agreement, which required China to boost its purchases of U.S. exports by $200 billion over two years. China’s fulfillment of this deal was hampered by the Covid-19 pandemic, and Trump has directed the U.S. Trade Representative to assess China’s compliance by April 1. Separately, last month, Trump utilized emergency authority to enhance domestic production of critical minerals, aiming to reduce dependence on overseas suppliers, including China.
These measures reflect ongoing efforts by both nations to adjust their trade strategies. China’s latest actions aim to protect its economic interests while responding to U.S. policies, maintaining a focus on key industries and resources essential for global markets.
