Tensions Rise as China Targets Rare Earths in Trade War

China has reportedly urged South Korean firms not to ship products containing its rare earth minerals to U.S. defense entities. This comes as part of China's response to U.S. tariffs, with a focus on export restrictions of 17 rare earth elements. South Korea is currently verifying these claims.

Reports have emerged that Beijing is cautioning South Korean companies against exporting products containing China's rare earth minerals to U.S. defense firms, as stated by the Korea Economic Daily. This advisory forms part of a larger strategy by China, responding to U.S. tariffs with tightened restrictions on rare earth exports.

These reports suggested China's Ministry of Commerce issued warnings of potential sanctions to Korean companies manufacturing high-tech products. However, an update indicates it was the 'Chinese government' relaying this message. South Korean authorities are currently validating these claims with both Chinese officials and local companies.

China's export restrictions on rare earth elements, crucial for manufacturing in defense, electronics, and consumer goods, demand applications for licenses — a procedure considered lengthy and unclear. As the leading supplier globally, China produces 90% of these minerals. The geopolitical ripple effects continue, as South Korea and the U.S. plan discussions in Washington over the looming tariff and trade discord.

(With inputs from agencies.)