China's Magnet Monopoly: How Rare Earths Fuel the US-China Trade War

China's Rare Earth Magnet Strategy: Impact on US-China Trade and Global Supply Chains On June 7th, 2025, a video by ABC News Australia highlighted China's strategic use of rare earth magnets in its ongoing trade war with the United States. China's near monopoly on the processing and refinement of these crucial materials gives it significant leverage. The video illustrates this by showcasing a conversation between fictional representatives of both countries. "Hey, United States, remember all those massive tariffs you put on our exports?", the Chinese representative begins, setting the stage for the conflict. The US representative initially dismisses the concern, stating, "Eh, so what, we'll just get them from somewhere else." However, this proves naive as China holds at least 90% of the global supply. A Ford spokesperson confirmed that their Explorer factory had been temporarily shut down due to a lack of rare earth magnets. This highlights the vulnerability of US industries reliant on these materials. The video concludes with a negotiated agreement to reduce tariffs and ease the export restrictions, offering a glimmer of hope for future supply chain stability. The incident underscores the complex interplay between trade policy, resource control, and global supply chains. It also emphasizes the need for diversification and the development of domestic rare earth magnet production in the United States.