As tensions escalate, the US is rallying allies to counter Beijing’s dominance in critical minerals
China’s tightening grip on rare earth exports has revived old tensions and opened new doors. Beijing’s export curbs on rare earth minerals have prompted US Treasury Secretary Scott Bessent to call for support from India and other allied nations, casting the standoff as “China versus the world.”
In an interview with Fox Business, Bessent described Beijing’s move as akin to pointing “a bazooka” at global supply chains and the industrial base of the free world. He emphasized that the U.S. is actively coordinating with like-minded partners and expects “substantial global support” from India, Europe and democracies in Asia.
He accused China of trying to leverage its command-and-control economic model to exert control over critical resources, declaring that the U.S. will assert its sovereignty in response. Bessent also warned that China’s export restrictions marked a provocative shift with serious implications for global supply security.
Impact of the ongoing ‘tariff wars’
This isn’t the first time that the US and China have clashed over rare earth minerals. In April, China announced export controls on a range of rare earths and related magnets as a response to US President Donald Trump’s broader tariffs on goods. The decision disrupted global supply chains that are vital to automakers, aerospace firms, semiconductor manufacturers, and military contractors.
The latest rare earth crisis led to US President Donald Trump imposing an additional 100% tariff on Chinese imports, effective November 1.
Rare earths are crucial elements used in electric vehicles (EVs), wind turbines, and defense electronics.
China’s rare earth curbs: What does it mean for India?
China currently dominates about 70% of rare earth mining and nearly 90% of processing capacity globally, giving it significant leverage over this critical sector. India imports nearly 90% of its rare earth magnets from China.
However, India is pushing to secure its own supply chain. It is reportedly preparing a ₹7,350 crore initiative to bolster domestic production of sintered rare-earth permanent magnets (REPMs) and reduce dependency on imports.
According to reports, the scheme, which will run over seven years, aims to establish a fully indigenous manufacturing chain, from converting neodymium-praseodymium oxide to magnet fabrication, with a target annual capacity of up to 6,000 tonnes.
India has also been reportedly working with the Kachin Independence Army (KIA), a powerful rebel group controlling parts of northeastern Myanmar, to obtain samples of rare-earth ores.
India – US trade negotiations in the spotlight
In August, the Donald Trump-led administration imposed a 50% tariff on Indian exports, blaming New Delhi for funding the Russia-Ukraine war by importing the deeply discounted Russian crude.
However, reports indicate that the imports have fallen significantly over the last six months, a point which could be crucial as New Delhi and Washington prepare to meet this week.
China’s latest moves come amid a wider trade standoff and could signal a subtle thaw in the strained India–US relationship.
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