In the trade war, China has moved to curb supply of critical minerals. Can Australia seize the moment?

In the US-China trade war, 31 critical minerals were exempted from tariffs, highlighting US reliance on China. China’s response includes expanded export controls, impacting global supply chains and offering Australia a strategic opportunity.

In the escalating trade war between the United States and China, one notable exception stood out: 31 critical minerals, including rare earth elements, were strategically exempted from tariffs.

This was not a gesture of goodwill. It was a tacit acknowledgment of the United States’ deep dependence on China for materials essential to its technological competitiveness, clean energy transition and national defence.

Beijing’s response was swift and calculated. China’s Ministry of Commerce announced expanded export controls and a shift in pricing principles. The move reflects China’s long-standing effort to shift rare earth pricing from market supply and demand to pricing based on their strategic value.

The impact was immediate. Rare earth exports from China effectively ground to a halt, as exporters awaited approvals under a new, opaque licensing regime.

The announcement prompted President Trump to issue a new executive order directing a review of national security risks stemming from the US reliance on imported, processed critical minerals.

As global supply chains reel from these disruptions, Australia finds itself in a unique strategic position. As a trusted US ally, it possesses the resources, partnerships and political capital to step into the breach. But can Australia seize this opportunity – or will it come with strings attached?

China’s latest restrictions target seven rare earths – such as dysprosium and terbium – crucial for electric vehicles, wind turbines, fighter jets and missile systems.

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