- President Donald Trump linked China’s new rare earth export controls to recent international developments.
- Shares of U.S.-based rare earth companies rose sharply after threats of increased tariffs on Chinese goods.
- The wider stock market declined, with technology and industrial indexes falling more than 1%.
- Trump stated the U.S. may use its own resource monopolies in response and consider other countermeasures.
- The move follows China’s announcement to limit exports of rare earth elements, which are critical for numerous industries.
President Donald Trump indicated that new Chinese export restrictions on rare earth elements could be connected to a recent Middle East peace agreement. He suggested these measures may be a reaction to broader geopolitical shifts and warned that the U.S. may consider retaliatory actions.
On Friday, shares of U.S. rare earth firms moved higher following Trump’s remarks and China’s announcement. USA Rare Earth (USAR) rose over 16%, while MP Materials (MP) saw gains of up to 14%. However, broader indices were negative, with the SPDR S&P 500 ETF down more than 1.5%, the SPDR Dow Jones Industrial Average ETF down over 1%, and the Nasdaq-100 tracking ETF off by 2%.
In a post on Truth Social, Trump accused China of a long-running effort to dominate global rare earth and magnet supply. He described the new export controls as part of a “sinister” strategy aiming at global reliance on Chinese materials. Trump added, “One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America.” He noted that several other unspecified countermeasures were under review.
Trump also mentioned the possibility of cancelling a scheduled meeting with China’s President Xi Jinping at the APEC summit in South Korea. He stated that the U.S. had the capability to leverage its own strategic resources if needed, writing, “I have just not chosen to use them, there was never a reason for me to do so — UNTIL NOW.” He acknowledged such actions could result in short-term market disruption but stated they would ultimately strengthen the U.S. position in vital materials.
Rare earth elements are minerals essential for manufacturing electronics, electric vehicles, and military equipment, placing their global supply under close watch by governments and industries worldwide.
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