Tariffs and minerals: when trade and resource wars collidehttps://en.majalla.com/node/327031/business-economy/tariffs-and-minerals-when-trade-and-resource-wars-collide
Tariffs and minerals: when trade and resource wars collide
China’s iron grip on the rare earths needed in today’s most strategic industries is something that US President Donald Trump appears to be focused on, but the fight also involves Europe
Jospin Mwisha / AFP
An M23 soldier holds damaged weapons in the Stade de l’Unité (Unity Stadium) in Goma, DRC on May 13, 2025.
Tariffs and minerals: when trade and resource wars collide
A new 21st-century geo-economic battle is heating up over rare earths, with China using its advantage in trade talks with the United States and the European Union. Exploiting its dominance over minerals access, Beijing is imposing new conditions in customs tariff negotiations, amidst fierce competition for the elements and metals that power today’s most strategic industries.
Electric vehicles (EVs), smartphones, and weapons systems are just some of the products known to need rare earths, in which China is a world leader, with a controlling interest in mines both at home and abroad. The Nuclear Energy Agency reports that China controls 60% of the global trade.
Now, Europeans are accusing Beijing of imposing export restrictions on certain minerals used in industries such as communications, vehicle manufacturing, defence, and even space exploration. The European Association of Automotive Suppliers said China was now subjecting some export licenses to complex administrative procedures and requesting sensitive information protected by industrial property rights.
Under the new regulatory framework, exporters must obtain government licences prior to exporting rare earths from China, specifying quantities and recipients. Al Majalla understands that only about 25% of all export requests are currently being approved, with non-commercial justifications cited for rejections.
Washington has expressed disappointment, arguing that it violates agreements made during negotiations in Geneva in May. These talks reduced US tariffs (on Chinese goods) from 145% to 30% and Chinese tariffs (on US imports) from 125% to 10%, in exchange for allowing the import of certain rare earth minerals and materials.
Under the new regulatory framework, exporters must obtain government licences prior to exporting rare earths from China, specifying quantities and recipients
The minerals card
Brussels is at a disadvantage in the trade war between the US and China due to its lack of rare and natural resources from outside Europe, and China appears to have 'played the minerals card' in response to the EU's decision to impose additional tariffs on EVs manufactured in China, including those bearing international brand names. It knows that Europe also has high industrial production costs, strict environmental protection requirements, strongly enforced intellectual property rights, and energy transfer regulations, so the continent's manufacturers are, in some ways, on the back foot.
Its automotive manufacturers are concerned about tightening restrictions on the export of strategic minerals, such as neodymium and dysprosium (needed for magnets). China controls 90% of the global production of these minerals, which are used in electric motors, power steering, and regenerative braking systems, helping firms produce low-emission vehicles.
The EU is phasing out production of petrol and diesel engines by 2035, but achieving this goal may be difficult if China restricts exports of certain rare earth elements. Yet there is no sign that the EU is reconsidering its customs duties of up to 35.3% on Chinese EV imports, because it wants to protect its domestic automotive industry, which relies on heavier and more expensive lithium-iron-phosphate batteries, which increase vehicle weight and manufacturing costs.
Tariffs and export licensing requirements for rare earth elements represent a new chapter in trade competition between China and the EU. In 2024, bilateral trade between the two reached $859bn, with $609bn in Chinese exports to Europe and $250bn in EU exports to China. According to Euronews, Brussels recorded a $357bn trade deficit.
Brussels is considering imposing taxes on millions of postal items from China valued at no more than $176 each, targeting Chinese online shopping outlets doing business within EU member states, but not every European state may be in agreement.
Copper wire cable production in coils at a metal steel industrial plant.
Trump's copper tariffs
Another vital metal used in industry is copper. Associated with human activity for more than 1,000 years, it remains essential to many civilian and military industries. Today, it is a critical component in the manufacture of renewable energy generators and green hydrogen production, among other things. The world's largest copper exporters are Chile, Peru, China, and the Democratic Republic of Congo (DRC).
In early July, US President Donald Trump announced the imposition of 50% tariffs on copper imports (though refined copper was exempt). The US produces 850,000 tonnes of copper annually but uses twice that amount, with most of the difference made up of imports from Chile (40%) and Canada (30%).
Given copper's strategic status, analysts question whether US industry can absorb the additional costs of a 50% tariff. According to a World Economic Forum report on the energy transition, demand for copper could surge by up to 600% by 2030. Trump has also indicated that similar tariffs may be extended to other strategic mineral imports, similar to those already applied to aluminium and steel imports.
While there is no consensus on what is meant by 'rare earth elements,' most agree that they comprise at least 15-17 types of minerals that (despite the terminology) are not actually scarce in terms of overall abundance. Rather, they are considered 'rare' because they do not occur in isolation, but are instead mixed with other minerals. This makes their extraction and separation a complex process requiring advanced technology, a field in which China leads the world.
Africa's earthly riches
Despite its importance and effects (both on human populations and the environment), the rare earth conflict has gone relatively unnoticed by the world's media, yet it helps explain Trump's interest in resolving long-standing conflicts in Africa's mineral-rich regions, such as his involvement in mediating an end to the 50-year conflict between Rwanda and the DRC.
Secretary of State Marco Rubio stands with Rwanda's FM Olivier Nduhungirehe and Democratic Republic of Congo's FM Therese Kayikwamba Wagner, after signing a peace agreement in Washington on June 27, 2025.
Cobalt, which is produced in only 17 countries in the Global South, is needed in EV manufacturing. It is used with nickel and manganese to produce multifunctional electric batteries known as NMC (Nickel Manganese Cobalt) batteries. Africa has enough of these critical elements to meet global demand for decades, with vast deposits in the African Great Lakes region. Likewise, Africa's deposits of gold, diamonds, phosphates, cobalt, lithium, copper, iron, manganese, platinum, silver, rhodium, coltan, tantalite, graphite, and bauxite are all hugely valuable.
Trade between China and African countries reached $134bn during the first five months of 2025, marking a 12.4% increase from the previous year. Chinese exports increased by 20%, cementing China's position as the continent's leading trading partner and the main beneficiary of African mineral resources. China has significant operations in the Great Lakes region, along the Atlantic coast, and across central and eastern Africa.
In exchange for exploiting these minerals, China funds and constructs big infrastructure projects, particularly ports, roads, airports, and railways. In return, it controls resources such as lithium mines in Zimbabwe (needed for EV battery manufacturing). According to the African Institute for Strategic Studies, Africa does not benefit from the increasing global demand for rare earths, nor do local populations.
The rare earth conflict helps explain Trump's interest in resolving long-standing conflicts in Africa's mineral-rich regions
Since taking office again in January, President Trump has been eager to meet African leaders, recognising Africa's mineral wealth and hoping to beat other industrial powers (such as China, Russia, Japan, Korea, and India, to name but a few) to deals to extract these critical elements, which are often used by US tech firms. Trump was also keen to hammer out a deal on Ukraine's mineral rights before agreeing to help the country.
Whether it be Ukraine, Gaza (which Trump wants to turn into a 'Mediterranean Riviera'), the DRC or elsewhere, the value of the physical earth—whether in terms of its subterranean mineral elements or its geostrategic location—is the lens through which the world's superpower currently sees all wars, whether in trade or otherwise. If China is now using rare earth export restrictions in its trade negotiations, it is likely to be a reaction to changing wind directions.
