Critical minerals sourcing rises against trade troubles

• Mainland China’s recent expansion of export restrictions on critical minerals, including rare earths used in magnets and batteries, has significantly disrupted global supply chains, particularly impacting the automotive sector.
• These restrictions led to a 32.1% year-over-year decline in US rare earth imports, highlighting mainland China’s dominance in supplying critical minerals.
• The restriction of antimony supplies by mainland China, added to their export control list on Aug. 15, 2024, has significantly impacted critical mineral supply chains, particularly affecting both civilian and military sectors due to its dual-use designation.
• The battery supply chains could face significant disruptions due to increased tariffs on supplies from mainland China and the world, through national security reviews, antidumping duties, and reciprocal tariffs. Both artificial and natural graphite imports are predominantly sourced from mainland China, accounting for 68.7% and 48.2% of US imports by weight in 2024, respectively.
• Rare earth elements, crucial for high-tech products like permanent magnets, face supply challenges due to mainland China’s export restrictions, impacting industries globally, particularly automotive makers in India.

While descriptions and definitions of what count as critical minerals vary, their importance for a wide variety of supply chains is clear.

The US Geological Survey identified 50 minerals deemed critical in 2022, while the Department of Energy in 2023 identified a scale of criticality in availability in the 2025–2035 period including materials that are not on the USGS list such as copper, electrical steel and silicon.

The forthcoming Section 232 consultation process will likely refine which materials are considered ‘critical,’ with 15 applications in electronics, 12 in the energy sector, 10 each in batteries and motors and 7 in specific aerospace/defense applications, the coverage could be wide-ranging.

Applications cover many industries, but the most impacted will be sectors that use small and or high-tech components that are at the front end of material sciences. Companies use rare earth and other minerals to allow for advanced sensing, microscopic transistors, and smaller yet more powerful motors and generators.

Mainland China extended the list of critical minerals restricted under dual-use export license rules in April 2025, including rare earths used in the production of permanent magnets, and batteries. Shipments were suspended under those rules in May, driving a decline in US rare earth imports of the materials by 32.1% year over year.

The need to issue licenses has disrupted corporate supply chains in sectors that require supplies of critical minerals, especially sectors like automotive. Europe has also lobbied the mainland Chinese government to fast-track licenses for companies, allowing some firms to get multiple licenses and not have to apply for each shipment.

Mainland China remains dominant in most critical minerals, providing 68.5% of US imports of a broad bucket of rare earth materials, 47.1% of US imports of tantalum, and 49.0% of US imports of artificial and natural graphite.

A new rare earth plant in Saskatoon, Canada, provides an example of some of the projects popping up to face the need, with the plant planning to provide permanent magnets to up to 500,000 electric vehicles coming online in 2025. These types of projects may receive additional state support to ramp up quicker if supplies remain constrained.

The low short-term impact of new projects can be seen in recently announced inter-country deals like the announcement between the US and Ukraine, which is likely to have a minimal impact on global supplies in the near term.

The US is looking to use Section 232 (national security) reviews to address supply concerns of critical minerals as well as other metals like copper. The stated goal of the reviews are to increase US production, while the likely action from the review will be tariffs on imports of the selected products, even though many of the goods have received tariff exemptions in the past due to their lack of domestic production.

The restriction of antimony supplies shows the impact of disruptions in critical mineral supply chains. The mineral was added to the mainland Chinese export control list on Aug. 15, 2024, covering the full product chain of raw materials and processed goods. Antimony is used for both civilian and military products, qualifying as a dual-use good.

Antimony is used in weapons (hence the dual-use designations) and the shortage has been flagged by arms manufacturers in the US and Europe, slowing military supply chains that were looking to ramp up.

The license requirements for defense-related goods allow mainland China to have greater control over goods leaving the country and could be used as a key foreign policy tool if trade tensions continue to be elevated. Antimony exports from mainland China to the world fell by 58.0% year over year in the first quarter of 2025, having dropped dramatically in the fourth quarter of 2024. Exports to the EU fell by 90.3% in the first quarter, while exports to the US fell by 99.9%, showing the focus of the export controls on influencing the US.

Thailand and Myanmar are also major players in antimony supply chains, representing 15.6% and 19.1% of global antimony exports in 2024, but show how the extraction and refining of critical minerals can be complex. Thailand’s top trading partners for antimony in 2024 were mainland China and Myanmar while Myanmar’s top partner was Thailand. This indicates that some antimony products may cross several borders, likely through different processing steps, before being sufficiently transformed to see a modification of tariff code.

Batteries are another key technology that is vulnerable to supply disruption, with the units requiring inputs of minerals like graphite and lithium. Lithium-ion car batteries from mainland China were targeted with increased duties in 2024 as well via the Section 301 investigation originally started by the first Trump Administration.

Battery supply chains were already experiencing headwinds as EV demand waned in the latter half of 2024, with investments being canceled and delayed. Lithium miners and refiners were also impacted, with a surplus of raw materials spurring a 114.8%. year-over-year increase in lithium shipments in October 2024.

Tariffs add another layer, with the US finding and proposing countervailing duties on mainland Chinese graphite supplies in addition to the broader tariffs on mainland China. Graphite supplies are also eligible for export license requirements when exporting from mainland China.

These types of restrictions will likely result in modified trade flows, especially as graphite imports have seen a ramp-up over the prior year, increasing by 79.5% year over year in the first quarter of 2025. Graphite provides a ready example for the impact of trade restrictions on supplies, as natural graphite was not produced in the US in 2024.

Graphite can be differentiated between natural and artificial origins, with artificial graphite making up 63.5% of US imports by weight in 2024, while natural graphite made up 36.5%. Imports of graphite of both types have increased in 2025 after seeing peaks in 2022 and lows in 2023.

Artificial and natural graphite both share a dominant supplier – mainland China.

Market Intelligence network analysis shows that mainland China’s importance in artificial and natural graphite supply chains is changing. One measure of network importance that counts the number and quality of export connections, indicates that mainland China is falling in global importance for natural graphite, falling to 10.2% year over year, and increasing in global importance in artificial graphite – up 12.1% year over year in 2024.

Countries rising in importance for natural graphite include Germany, whose score increased by 182.6% year over year in 2024, and the Netherlands, whose score increased by 124.5%. South Korea’s score more than doubled, and the US saw increased importance – likely from reexports of intermediate products.

The artificial graphite network saw the same second place country the same as natural, Germany, but not as strong an increase, rising by just 5.9% year over year in 2024. The US also saw increased importance, up 39.2%, likely for the same reasons as in natural graphite, while Japan’s importance increased by just 1.6% year over year in 2024. South Korea’s importance fell, down 37.9%, and falling from the third most important network participant to the fifth.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.