Japan on Wednesday condemned China’s decision to ban exports of dual-use items goods and technologies with both civilian and military applications to the country, calling the move “absolutely unacceptable and deeply regrettable.” The ban comes after Japanese Prime Minister Sanae Takaichi warned late last year that a Chinese attack on democratically governed Taiwan could constitute an existential threat to Japan. Beijing demanded that she retract the remarks, which she has not done, prompting a series of countermeasures culminating in Tuesday’s export restrictions.
Dual-use items include certain rare earth elements essential for manufacturing drones, semiconductors, and other high-tech equipment. While Japan has diversified its sources since a similar 2010 Chinese export throttle, around 60% of its rare earth imports still come from China.
Why It Matters
The ban raises concerns about supply chain disruptions for Japan’s high-tech and automotive sectors. Analysts warn that even a three-month curtailment of rare earth exports could cost Japanese companies $4.2 billion and shave 0.11% off annual GDP, while a year-long restriction could reduce GDP by 0.43%.
The move also underscores growing geopolitical tension in East Asia, as China seeks to signal its displeasure with statements it perceives as provocative, while Japan navigates the delicate balance of defending Taiwan’s security without escalating conflict.
Japan faces potential economic and strategic vulnerability, particularly in industries reliant on rare earths and dual-use technologies. Chinese authorities are leveraging export controls to assert political pressure, while Japanese business leaders and military contractors are monitoring the situation for immediate impacts. U.S. President Donald Trump has reportedly advised Takaichi to avoid further escalation, reflecting broader international concern over the dispute.
What’s Next
Japan will likely continue diplomatic engagement with China to clarify the scope of the export restrictions and mitigate potential economic fallout. Businesses are bracing for possible supply chain disruptions, while analysts expect the dispute to persist for months, reminiscent of past rifts over territorial and trade issues. Monitoring China’s rare earth licensing policies will be key, as any broader restrictions could affect Japan’s industrial output and regional trade dynamics.
With information from Reuters.