China is using its top supplier position in yttrium, a silvery metal used in heat-resistant ceramic coatings for jet engines and power turbine blades, as well as in electronics and optics, to pressure the Trump administration. Disrupted shipments expose another critical material dependency that gives Beijing leverage over Washington as resource wars continue to play out.Reuters reports that Beijing imposed export controls on yttrium and six other rare earths in early 2025. Deliveries to the U.S. halted for several months last year and have since resumed only sporadically, creating shortages across the aerospace, energy and semiconductor industries.Last October, President Trump hailed his meeting with China’s Xi Jinping as an “amazing” summit, but the flow of yttrium stopped shortly afterward. By February, a shortage had sparked production stoppages across the U.S. coating supply chain.According to Reuters columnist Andy Home, China shipped 60 metric tons of yttrium oxide to the US in March following an apparent White House intervention on behalf of a major company. Another 29 tons arrived in July after a further shipment interruption. He warned that these uneven shipments highlight Beijing’s willingness to weaponize critical material shipments to the US. Beyond yttrium, Beijing has also restricted supplies of gallium, germanium, terbium and dysprosium in what only appears to be a repeat of its diplomatic spat with Japan in 2010 over disputed islands in the East China Sea. Tungsten is also another critical material that Beijing has limited exports to the West. MSC Industrial executive Martina McIsaac warned last week at the Jefferies Industrials Conference that the supply crunch (happening again) has rippled through its supply chains, sending prices higher for tools and supplies used by factories and machine shops across North America.Christian Keller, Barclays’ global head of economics research, recently warned that “China’s quasi-monopolistic position provides it with significant geopolitical leverage.” The West certainly faces a prolonged period of supply vulnerability, as alternative mining and refining capacity will take years to build out.Keller’s view merely suggests China will retain its dominance in these critical materials through at least 2030, preserving Beijing’s ability to weaponize these exports as geopolitical leverage:In this context, China plays a crucial role, given its tight control over the global critical mineral supply chain and refining capacity, including graphite, gallium and rare earths (Figure 10 & Figure 11). China’s quasi-monopolistic position provides it with significant geopolitical leverage. Other countries also use export controls for minerals where they have dominant positions to gain strategic leverage, eg, Indonesia with nickel and bauxite.The Trump administration’s hell-bent move on rewiring global energy flows was explained by Zoltan Pozsar of advisory firm Ex Uno Plures in March: “The aim is not to deny energy to China. The aim is to level the playing field between the two countries. To be blunt, in ways I couldn’t be at Credit Suisse: if you f*ck me on rare earths, I f*ck you on energy.”Beijing certainly won’t give up its rare earths leverage, while the Trump administration can use energy as a counterweight. But one can only suspect that resource nationalism by both sides could deepen shortages and production disruptions across the global economy as the two superpowers duke it out.
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