China has once again demonstrated its dominance in the global minerals market by imposing new export restrictions on five key metals—tungsten, tellurium, bismuth, molybdenum, and indium. This move comes just as U.S. President Donald Trump imposed an additional 10% tariff on Chinese goods, escalating an already tense trade war between the world’s two largest economies.

While this isn’t the first time China has restricted the export of critical minerals, the timing of the announcement makes it clear that Beijing’s decision is a direct response to Trump’s trade policies. As Reuters reports, “China announced sweeping export controls on Tuesday targeting five metals used across defense, clean energy and other industries, minutes after an additional 10% tariff on Chinese goods imposed by U.S. President Donald Trump came into effect.”

This development signals an intensifying battle over resources essential for modern technology, from semiconductors and electric vehicles to military equipment. With China holding a near-monopoly on the production and refinement of many of these minerals, the latest restrictions are likely to disrupt global supply chains, drive up prices, and force the U.S. and its allies to scramble for alternative sources.

The Five Restricted Metals and Their Importance

China’s latest curbs target five key minerals, each of which plays a crucial role in industrial and technological applications.

1. Tungsten: The Backbone of Military and Industrial Strength

• Uses: Tungsten is used in armor-piercing ammunition, high-speed cutting tools, aerospace components, and industrial machinery.
• China’s Role: As the dominant supplier of tungsten, China produces over 80% of the world’s supply.
• Impact: Tungsten is essential for defense manufacturing, and any disruption in supply could impact U.S. military readiness. While the U.S. has been working to reduce its dependence on Chinese tungsten, the mineral remains a crucial import for many industries.

2. Tellurium: A Key Player in Renewable Energy

• Uses: Tellurium is used in the production of high-efficiency solar panels, thermoelectric devices, and semiconductors.
• China’s Role: China is the world’s largest supplier of tellurium.
• Impact: The solar industry is particularly vulnerable to supply chain disruptions. The restriction of tellurium could slow down renewable energy projects, affecting global clean energy goals.

3. Bismuth: The Lead-Free Alternative in Electronics

• Uses: Bismuth is used in pharmaceuticals, cosmetics, and lead-free soldering for electronics.
• China’s Role: China controls around 70% of the world’s bismuth production.
• Impact: The electronics industry, particularly manufacturers of circuit boards and semiconductors, may face increased costs and supply chain delays.

4. Molybdenum: Strengthening Steel for Construction and Defense

• Uses: Molybdenum is an essential additive in steel production, improving strength, corrosion resistance, and heat tolerance. It is widely used in construction, pipelines, and aerospace engineering.
• China’s Role: Although the U.S. has a domestic supply of molybdenum, China remains a significant global player.
• Impact: While the immediate effect on the U.S. may be limited, global steel prices could rise, affecting infrastructure projects and defense manufacturing.

5. Indium: The Hidden Hero of Touchscreens and Semiconductors

• Uses: Indium is a critical material in touchscreens, flat-panel displays, microelectronics, and advanced semiconductors.
• China’s Role: While the U.S. has diversified its indium supply, China remains a dominant producer.
• Impact: Tech companies could face price hikes and delays in obtaining key components for smartphones, tablets, and other electronic devices.

A Retaliatory Move with Global Consequences

The timing of China’s export restrictions makes it clear that this is not just a routine policy adjustment—it is a direct response to escalating trade tensions with the U.S. As OilPrice.com notes, “China’s bans, although chronologically preceding the Trump tariffs, are a retaliatory measure to U.S. trade policy.”

China’s strategy has long been to leverage its control over critical minerals as a geopolitical tool. This latest move follows previous restrictions on rare earth elements, gallium, germanium, and graphite—materials essential for electric vehicles, semiconductors, and military hardware.

The decision also underscores China’s dominant position in global supply chains for minerals essential to the energy transition. As OilPrice.com explains, “When it comes to the transition, in other words, China holds all the cards.”

How the U.S. and Western Markets Will Be Affected

Immediate Effects: Price Spikes and Supply Chain Disruptions

The most immediate consequence of China’s export curbs will be rising prices. This has happened before—when China restricted exports of antimony, gallium, and germanium in 2024, prices skyrocketed.

• Antimony prices soared by 250% within a year, hitting $40,000 per ton as Western buyers scrambled for non-Chinese suppliers.
• A European metals trader told Reuters at the time, “We have already sold some small quantities for $40,000. Non-Chinese sellers…will charge more to maximize profits.”

A similar scenario is likely to unfold with tungsten, tellurium, and the other newly restricted minerals, particularly if China tightens restrictions further.

Long-Term Effects: The Search for Alternative Suppliers

While Western nations have been working to diversify their critical mineral supply chains, China remains the dominant force. Developing new mining projects takes years and requires substantial investment.

Ellie Saklatvala, a senior analyst at Argus, told the South China Morning Post, “In the short term, it will be very difficult for the U.S. to significantly reduce its reliance on China for critical minerals—it usually takes many years and huge investments to develop new supply sources.”

Some alternative suppliers exist:

• Canada has reserves of 16 out of 50 critical minerals classified as essential by the U.S. government, including germanium and gallium.
• Australia and Japan have been expanding their mining operations, but scaling up production to meet global demand won’t happen overnight.

Geopolitical Implications: China’s Growing Leverage

China’s latest move is also a warning shot to the rest of the world—especially the U.S. and Europe. By controlling the supply of minerals essential to both clean energy and military technology, Beijing is ensuring that any economic pressure from the West can be met with economic retaliation of its own.

Vlado Vivoda, a critical minerals expert at the University of Queensland, told the Wall Street Journal, “It’s not an outright ban, the U.S. hasn’t been singled out, [but] that doesn’t mean it won’t happen.”

ACZ Editor: This could last a while or it could be over in a flash, like with Mexico and Canada. But we will need to anticipate the consequences of a lasting trade war.