China’s Ministry of Commerce recently issued ‘Announcement No. 62 of 2025,’ a seemingly innocuous document that has significantly disrupted the fragile tariff truce between China and the United States. The announcement introduces stringent new restrictions on rare earth exports, tightening Beijing’s control over these critical minerals essential for technologies ranging from smartphones to fighter jets. Under the new regulations, foreign companies must obtain Chinese government approval to export products containing even minimal amounts of rare earths and declare their intended use. This move underscores China’s near-monopoly in rare earth processing, which accounts for approximately 70% of global supply. In response, US President Donald Trump threatened to impose an additional 100% tariff on Chinese goods and implement export controls on key software. US Treasury Secretary Scott Bessent criticized the measures, stating, ‘This is China versus the world. They have pointed a bazooka at the supply chains and the industrial base of the entire free world.’ A Chinese Commerce Ministry spokesperson countered, accusing the US of introducing 20 measures to suppress China shortly after September’s economic talks in Madrid. The escalation has also seen both nations impose new port fees on each other’s ships, marking the end of months of relative calm since a May truce. Experts predict that China’s rare earth restrictions will give it the upper hand in upcoming negotiations between Trump and Chinese President Xi Jinping. Analysts note that while rare earths constitute a small fraction of China’s $18.7 trillion economy, their strategic value is immense, providing Beijing with significant leverage. Despite the tensions, both sides have left the door open for negotiations, with Bessent expressing optimism about de-escalation. However, China’s recent actions are seen as a strategic move to strengthen its position ahead of trade talks, leveraging its dominance in rare earths to pressure Washington for a favorable deal.