NEW YORK, Oct 11 — Businesses across the global semiconductor supply chain are bracing for major disruptions after China imposed strict new export curbs on rare-earth minerals, prompting President Donald Trump to announce retaliatory tariffs and new export controls.
The impact on the industry was immediate, with the restrictions threatening to cause weeks-long shipment delays for key players like ASML Holding NV, the world’s only manufacturer of the most advanced chipmaking machines, Bloomberg reported.
Other US chip companies are scrambling, with senior managers expressing concern over rising prices for essential components and rushing to identify which of their products are now subject to China’s new licensing requirements.
China’s new rules, which require approval for shipping any material containing its rare earths, are being viewed as its most aggressive move yet to control the global technology supply chain.
“These are the strictest export controls that China has utilised,” said Gracelin Baskaran, a critical minerals expert at the Center for Strategic and International Studies. “It’s quite clear that they have the sticks and the leverage to make... firms worldwide comply.”
In a swift response on Friday, President Trump announced an additional 100 per cent tariff on many Chinese goods, raising import taxes to 130 per cent starting next month.
He also announced new export controls on “any and all critical software” and threatened to call off a planned meeting with Chinese President Xi Jinping, describing the new rare-earth controls as a “hostile” action.
“I have always felt that they’ve been lying in wait, and now, as usual, I have been proven right! There is no way that China should be allowed to hold the World ‘captive,’” Trump said in a post on his Truth Social platform.
The repercussions were felt globally. Germany’s economic ministry called the curbs a “great concern,” while Taiwan’s economic affairs ministry said it was assessing the potential impact on its vital chip industry.
This is not the first time rare earths have become a centrepiece of the US-China trade war. Earlier this year, both nations engaged in a similar cycle of tariffs and export cuts before agreeing to a temporary truce, which has now clearly ended.
The escalating dispute puts the world’s biggest chipmakers — including Intel Corp., Taiwan Semiconductor Manufacturing Co, and Samsung Electronics Co — in a precarious position, as they all rely on equipment from companies like ASML that are now directly in the line of fire.
