China Tightens Control Over Rare Earths, Sparking Silent Tech War with US

China has enacted a new legal framework that gives the state absolute authority over the extraction, refining and export of critical minerals, including rare earths and indium. The rule allows Beijing to set quotas, grant export licenses and impose "counter‑measures" against external interference, effectively turning the entire supply chain into a political lever.

The United States faces mounting pressure as China produces roughly 70% of global indium and processes about 90% of the world's rare earths. Restrictions that began in early 2025 caused prices to surge by around 250%, prompting US tech leaders—including executives from Nvidia, Apple and photonics firms—to seek faster licensing and alternative sources. The supply squeeze also impacts Taiwanese optoelectronics makers and European manufacturers, prompting the EU to develop its own “minerals bunker”.

At the recent G7 summit in France, member states discussed coordinated strategies to diversify critical‑mineral supply chains, citing projects in Canada, Africa, Latin America and Australia. Japan highlighted joint storage schemes, while the United States stressed accelerated permitting and subsidies for domestic processing facilities.