China Issues New Mineral Export Controls After US Imposes Tariffs

Cargo ships loaded with containers berthing in Qingdao Port, Shandong Province, China, on Jan. 13, 2025. STR/AFP via Getty Images

China is implementing new export controls on five rare metals crucial for defense and other industries, as part of a package it unveiled shortly after the Trump administration enforced an additional 10 percent U.S. levy on Chinese goods.

In a statement released on Feb. 4, China’s commerce ministry and customs officials announced the export restrictions on metals such as tungsten and indium. These measures take effect immediately.

A spokesperson for the commerce ministry said in a separate statement that the new restrictions on 25 rare metals and related technologies are intended to “better safeguard national security and interests” and comply with international “non-proliferation” obligations.

Beijing’s announcement means traders who seek to export these minerals in various forms will now have to obtain a license from the Chinese authorities and provide detailed information about the overseas buyers and their export plans.

The metals affected are tungsten, tellurium, bismuth, indium, and molybdenum. Among these, the first four have been identified as critical to U.S. economic and national security by the Interior Department, while the Defense Department has classified all five as Materials of Interest.

Tungsten

Tungsten, known for its hardness and high melting point, is pivotal in defense technology. Its unique properties make it ideal for military applications such as armor-piercing projectiles, missiles, and shielding equipment from nuclear radiation.

In the United States, approximately 60 percent of tungsten is used to manufacture durable components for tools and machinery, primarily in construction, mining, and oil and gas drilling. It’s also used to produce electrical components such as wires and filaments, according to the U.S. Geological Survey (USGS).

The United States does not currently produce any tungsten, and the global supply chain is dominated by Chinese producers, according to the USGS.

As China has tightened controls over its critical minerals exports in recent years, analysts have recommended that the United States seek alternative sources for this metal. One choice is South Korea, where Almonty Industries plans to reopen the world’s largest tungsten mine, the Sangdong.

Acquired by Almonty Industries in 2015, the Sangdong mine is located in Yeongwol County, roughly a three-hour drive from Seoul. The mine was shut down 30 years ago as Chinese tungsten production surged. The Canada-based company has committed to a long-term supply contract that will see 45 percent of its tungsten output shipped directly to the United States.

Tellurium

Tellurium, a byproduct of copper refining, is mainly used in making solar panels, memory chips, and other products.

In 2023, China accounted for 67 percent of global tellurium production, according to data from the USGS.

Unlike many minerals that depend entirely on imports, the United States generates half of its tellurium from domestic sources, with almost all of it coming from a copper refinery in Amarillo, Texas, according to the USGS.

As for the imports, about 75 percent are sourced from China and Canada, with smaller quantities from producers in the Philippines and Belgium, the agency said.

Bismuth

Bismuth is mainly used to make chemicals used in everyday products such as health care, beauty products, and electronics in the United States. However, according to the USGS, the country has not produced bismuth domestically since 1997, relying heavily on imports to meet its needs.

Most of the bismuth used in the United States comes from China. Between 2020 and 2023, approximately 67 percent of U.S. bismuth imports were sourced from China, with additional supplies coming from South Korea, according to the most recent USGS data.

Molybdenum

Molybdenum is key to the construction sector in the United States and is primarily used to enhance the strength of iron and steel. It is also used in making everyday items, such as ingredients in lubricants and paints.

The United States has worked on boosting its domestic supply of molybdenum and sourced most of it from Chile rather than China. From 2020 to 2023, U.S. imports from Chile made up 77 percent of total imports, according to USGS.

Currently, the U.S. share of molybdenum global production is about 12 percent, while China dominates the market with a 40 percent share, USGS data show.

Indium

Indium is a widely used metal that is not currently mined in the United States. Instead, U.S. companies source indium from countries such as China and South Korea to make products.

Indium is primarily used to produce a transparent coating called indium tin oxide, or ITO. This coating plays a vital role in the screens of devices such as TVs and smartphones.

Indium is also essential for manufacturing lasers and receivers utilized in advanced fourth- and fifth-generation fiber-optic networks.

The USGS said China is the world’s leading producer and exporter of indium, responsible for 70 percent of global production.

In September 2024, the United States implemented a 25 percent tariff on indium, tungsten, and other commodities imported from China. This decision, announced by the Office of the United States Trade Representative, followed a more than two-year review of the tariffs originally imposed by the first Trump administration.

As of September 2024, approximately 25 percent of the indium imported by the United States originated from China, according to the USGS.