China retaliates against US reciprocal tariff hike!
In retaliation for the 34 percent additional customs duty imposed by the US, China has made the export of rare earth elements subject to authorization. The new move signals an intensification of the economic war between the two countries.
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China has made a move against the 34 percent additional customs duty applied by the US on imported products within the scope of "reciprocal tariffs." The Beijing administration has imposed restrictions on the export of certain rare earth elements, for which it holds the majority of the global supply.
According to the statement by the Chinese Ministry of Commerce, starting from April 4, samarium, gadolinium, terbium, dysprosium, lutetium, scandium, yttrium, and alloys of these elements will be included in the export control list. Thus, Chinese firms will only be able to export these metals with official permission. Furthermore, Chinese customs authorities will be able to seize shipments suspected of containing these restricted elements.
China holds approximately 90% of the world market in the production of these elements, which are used in many fields ranging from weapon systems to high-performance engines, and from nuclear reactors to electronic and optical devices. This move by Beijing has shown that it is prepared to use its global weight in rare earth elements as a strategic weapon once again.
On the other hand, Beijing had also imposed bans and restrictions on the export to the US of gallium, germanium, and antimony, which are critical for chip production, as well as materials like graphite used in batteries and fuel cells, on December 3, 2024.
RESPONSE TO US CUSTOMS MOVE
China's export restriction came after US President Donald Trump announced that they would impose an additional 34 percent customs duty on products imported from China within the scope of "reciprocal tariffs."
The Washington administration introduced a 24 percent "reciprocal tariff" in addition to the existing 10 percent base tariff, bringing a new total burden of 34 percent on imports. Thus, the total tax rate applied to products of Chinese origin reached 54 percent.
China had also announced that it would impose additional customs duties at the same rate on US products in retaliation, and had also announced new sanctions targeting American companies.