U.S. tariff threats and China’s expanded rare-earth licensing are intensifying a legal, strategic clash over global supply chains.
U.S. and Chinese trade measures over rare-earth exports have escalated into a legal and strategic standoff. President Trump has threatened a 100% tariff on Chinese goods beginning in November, explicitly tying the move to Beijing’s tighter controls on rare-earth elements. China responded with a warning of “firm countermeasures” and rolled out Announcement No. 61 (2025), expanding export-license requirements for additional rare earths, magnets, and processing equipment. Under U.S. law, tariff authority is largely delegated by Congress to the executive branch: Section 232 allows import restrictions after a Commerce Department national-security finding, while Section 301 authorizes retaliatory measures against “unreasonable” foreign trade practices. Courts continue to define how far those delegations reach. Beijing frames its licensing regime as national security and resource management, not a blanket ban. Legally, this sits in a gray area: a 2014 WTO ruling found China’s earlier quotas unlawful, but licensing and security exceptions invoke GATT Articles XX and XXI and remain contestable. Both capitals are testing the boundaries of international trade law—using tariffs, licensing and security exceptions as strategic levers—and in practice are reshaping supply risks for technology, defense and clean-energy sectors.