China expanded export controls on rare earths and critical minerals on October 9, 2025.
President Trump threatened to raise duties on Chinese goods by 100% in response.
The S&P 500 fell by 2.7%, the biggest single-day drop in six months.
China's export control impacts products with over 0.1% China-origin rare earths.
US-China trade tensions could trigger a price surge in the US.
India's imports from China surpassed $100 billion in 2023-24.
Detailed Insights:
China's export controls require approval for products containing more than 0.1% China-origin rare earths or made using Chinese technology.
This impacts various sectors, including F-35 fighter jets, EV motors, and wind turbines, given China's control of 70% of global rare-earth refining capacity.
The US may seek to diversify its mineral supply chains to countries like Australia, Vietnam, and Canada.
Ajay Srivastava suggests that an escalating trade war could lead to inflation in the US, potentially undermining President Trump's economic agenda.
India should focus on self-reliance in critical technologies and minerals, insulating its economy from trade shocks.
MUFG Research suggests China's measures could be a negotiating strategy ahead of the APEC Summit.
Rhodium Group highlights concerns about weak Chinese demand for imported goods and the growing gap between its manufacturing exports and imports.
Key Concepts Involved:
Rare Earths: A set of seventeen metallic elements that are essential in many modern technologies.
Export Controls: Government regulations that restrict the export of certain goods or technologies.
Friend-shoring: The practice of sourcing inputs and manufacturing in countries that are allies.