China-America Tariff War: Ever since Donald Trump took command of America again, there is turmoil in the entire world. Although President Trump has taken many steps, the tariff war has shaken the foundation of the existing international structure. The Trump administration has also imposed 50 percent tariff against a friendly country like India. America’s tussle with China is old, but in this time of tariff war, the tension has reached its peak. China had imposed additional duty on the American ship. Apart from this, Beijing has also announced to reduce rare earth minerals shipment from USA. Frustrated by this, Donald Trump has announced to impose additional tariffs of up to 100 percent on China. In this way, the total tariff on China has now reached 130 percent. Amidst all this, Chinese President Xi Jinping has made a new move, which is sure to make Trump more aggressive.
‘Rare earth magnets should not reach America’
According to the report of ‘Times of India’, China wants that the heavy rare earth metallic magnets sent to India should not reach America in any form. Officials said that the Indian government has not yet formally accepted this condition. According to sources, China is moving towards an agreement with America regarding heavy rare earth magnets and is hesitant about the supply without concrete assurance. Beijing currently controls 90% of the world’s production of heavy rare earth magnets and no longer releases export data for specific countries. It is believed that China is using the strong position of its supply chain as pressure tactics in trade talks with America.
America suffers loss due to China’s move!
This move by China may cause huge loss to America. Even if relations between India and America become cordial, it will not be able to help America in the matter of supply of rare earth magnets. Although India has not yet given any such guarantee to China, looking at China’s attitude, it can be easily guessed that the coming days are not going to be easy for Trump’s America.
Impact on EV sector in India
Electric vehicle (EV) manufacturers in India are the largest consumers of these magnets. These high-power magnets are extremely essential not only for EV motors but also for renewable energy, electronics, aerospace and defense industries. Although China has resumed the supply of light rare earth magnets after the Shanghai Cooperation Organization (SCO) summit (31 August-1 September), there is still a shortage of heavy rare earth magnets. This is affecting motor manufacturing of large EVs (like three-wheelers, cars, trucks and buses).
security conditions on export
China had imposed restrictions on the export of medium and heavy rare earth products on April 4, 2025, saying that this was a step related to national security. This step was taken after US President Donald Trump increased tariffs on Beijing. Under the new rules, Chinese exporters have to obtain a license from the Commerce Ministry and it is mandatory to present End-User Certificate (EUC). This certificate assures that the material will not be used in weapons of mass destruction or their delivery system. Although China has recently resumed supplies of rare earth magnets to Europe and South-East Asia, exporters supplying to India are still awaiting approval for export licenses. During the financial year 2024-25, India imported a total of 870 tonnes of rare earth magnets, worth ₹306 crore.