The clock is ticking before a tenuous U.S.-China trade truce expires this fall, and the countdown has left U.S. President Donald Trump increasingly desperate to ditch Chinese rare earths once and for all.<\/p>\n
Few world powers understand that feeling quite like Japan. After all, the country has been in Washington\u2019s shoes before: China shocked the world in 2010 when it halted<\/a> rare-earth shipments to Japan over a geopolitical spat, driving a supply chain reckoning in Tokyo.<\/p>\n Sixteen years later, Japan is often hailed as the country that has most successfully diversified away from Chinese rare earths. Yet it is far from out of the woods.<\/p>\n In apparent retaliation against Japanese Prime Minister Sanae Takaichi\u2019s remarks about Taiwan last year, Beijing has again unleashed its supply chain might against Japan. The pressure campaign is still going: Customs data released last month showed that Beijing continued to strangle its flows of key rare earths<\/a> to Japan in June, and firms and manufacturers across the country are feeling the pain.<\/p>\n As Washington follows in Tokyo\u2019s footsteps, the latter offers a window into just how challenging it can be to break free of Beijing\u2019s chokehold\u2014with stark lessons for U.S. policymakers.<\/p>\n \u201cJapan is a cautionary tale,\u201d said Gracelin Baskaran, a mining economist at the Center for Strategic and International Studies (CSIS).<\/p>\n One of the most formidable weapons in China\u2019s trade arsenal has been its chokehold over global supply chains of rare earths, the elements that underpin powerful technologies ranging from fighter jets to wind turbines.<\/p>\n China dominates around 85 percent of rare-earth processing and 92 percent of magnet production. Its command is particularly pronounced when it comes to the industrial separation<\/a> of a subset of rare earths known as heavy rare earths\u2014giving it immense leverage over other countries.<\/p>\n That became clear in 2010, when China briefly halted rare-earth exports to Japan. Alarmed, Tokyo waged an all-out effort to plug its supply chain vulnerabilities, including by building stockpiles and inventories, pumping vast sums of money<\/a> into the sector, and embracing public-private partnerships<\/a> and off-take agreements.<\/p>\n Tokyo\u2019s efforts have spanned the globe. Japan has poured hundreds of millions of dollars<\/a> into Lynas, an Australian firm that recently became the first to successfully produce heavy rare earths<\/a> outside of China. Japanese auto manufacturers have also turned abroad, with a raft of rare-earth agreements with countries ranging from Canada to Australia.<\/p>\n \u201cJapan sees this as a network strategy, that you cannot solve this puzzle on your own,\u201d said Mireya Sol\u00eds, an expert on Japanese foreign economic policy at the Brookings Institution.<\/p>\n By 2018, Japan had cut its dependence on Chinese rare-earth imports to around 58 percent<\/a>. Yet it remains the world\u2019s biggest importer of rare-earth metals, according to a CSIS report that was co-authored by Baskaran. Even as Tokyo has cut its dependence on Beijing, it imports substantial quantities<\/a> of rare-earth metals from countries whose industries are deeply intertwined with China, such as Vietnam, the report noted.<\/p>\n The report\u2019s verdict was blunt: \u201cClaims that Japan has successfully de-risked its rare earth supply chains and reduced reliance on China are misguided.\u201d Indeed, after China imposed broad curbs<\/a> on certain rare-earth elements and magnets in 2025, some Japanese automakers were forced to suspend production<\/a>.<\/p>\n Rare-earth access remains \u201cthe big Achilles\u2019 heel for Japan,\u201d said Jane Nakano, an expert in energy security at CSIS.<\/p>\n It has been difficult for Japan to secure supplies of heavy rare earths, which are particularly complicated to find and separate, according to Tom Moerenhout, who leads the Critical Materials Initiative at Columbia\u2019s Center on Global Energy Policy. Since rare earths mineralize together in nature<\/a> and are chemically similar<\/a>, separation is required to isolate individual elements, although the process carries environmental risks<\/a>.<\/p>\n \u201cIn terms of the heavy rare earth ones\u2014and then specifically dysprosium\u2014they are still very much reliant on China,\u201d Moerenhout, referring to a type of heavy rare earth. \u201cFor this particular rare earth, Japan has been doing every move correctly to diversify, but it just shows how long it takes to actually achieve the results on the ground.\u201d<\/p>\n Beijing has used that to its advantage. Tensions between both countries soared last November after Takaichi remarked that a potential blockade or seizure of Taiwan would constitute a \u201csurvival-threatening situation\u201d for Japan\u2014and thereby authorize<\/a> Japanese military action. Months later, China strangled its exports of rare earths and magnets<\/a> to the country.<\/p>\n For Japanese firms, the ongoing pressure campaign has been painful. While inventories and stockpiles<\/a> have helped cushion the shock, months of disruption have taken their toll, so much so that the Trump administration reportedly<\/a> went as far as to ask Beijing\u2014unsuccessfully<\/a>\u2014to resume flows to Japan in June.<\/p>\n Many companies are going into \u201cabsolute contingency mode,\u201d Moerenhout said.<\/p>\n Take Shin-Etsu, a major Japanese magnet maker, which reportedly stopped taking<\/a> new orders for magnets with dysprosium and has announced plans to build a new refining facility<\/a>. Japanese automaker Mitsubishi, which reportedly only has enough rare-earth stocks<\/a> to last through mid-2026, recently partnered with the American firm ReElement Technologies to jointly advance<\/a> a supply chain.<\/p>\n And more businesses have been sounding the alarm<\/a>. Of the 200 filings that mentioned rare earths to the Tokyo Stock Exchange in May and June, more than two-thirds warned that China\u2019s export controls<\/a> were having a negative impact or threatened to do so, Reuters reported.<\/p>\n The Japanese government has also ramped up its efforts globally, with Takaichi recently spearheading a proposal among the G-7 to cooperate on critical mineral stockpiles<\/a> to jointly counter China. Tokyo is also increasingly looking underwater, with big ambitions<\/a> of partnering with the United States to exploit rare earths in the deep sea.<\/p>\n But for all those efforts, the real test may be whether Japanese firms can withstand China\u2019s continued squeeze.<\/p>\n \u201cIt\u2019s again the question of how long can they sustain this, and it\u2019s not clear,\u201d Sol\u00eds said.<\/p>\n Japan\u2019s trials and tribulations may offer a warning for Washington as it embarks on its own journey to ditch Chinese rare earths.<\/p>\n After the Trump administration unveiled steep tariffs<\/a> on much of the world in 2025, China struck back in part by announcing its own rare earth curbs<\/a>. After several rounds of other escalations and high-level trade talks, both sides agreed to a one-year trade truce that saw Beijing temporarily suspend its rare-earth export controls<\/a>.<\/p>\n That truce is set to expire in November<\/a>, with Trump and Chinese President Xi Jinping expected to meet in the United States in September<\/a>. Ahead of both dates, rare earths have been top of mind for U.S. officials, who pressed the issue in a meeting with their Chinese counterparts in July.<\/p>\n \u201cIn our discussion, I emphasized that we expect Beijing to fully meet its \u200bcommitments on rare earths and U.S. agricultural products,\u201d U.S. Treasury Secretary Scott Bessent said in a post on X<\/a>.<\/p>\n Critical mineral security has been a top priority for the Trump administration, both domestically and abroad. Among other measures, Washington has ordered U.S. manufacturers<\/a> to stop sourcing rare earths, magnets, and select other minerals from China by the end of this year, although it remains unclear<\/a> whether they will be able to meet that deadline.<\/p>\n Eager to secure new supply chains, the White House has embraced equity stakes in mining firms; turbocharged federal support for the sector; inked deals abroad, including with Tokyo; announced a $12 billion stockpile; pitched a global minerals trading bloc; and attempted to strongarm minerals from other places.<\/p>\n The Trump administration\u2019s campaign kicked into overdrive this month with $3 billion in new investments aimed at boosting domestic production and U.S. mining schools. \u201cWe\u2019re reclaiming America\u2019s rightful place as the minerals superpower of the world,\u201d Trump declared<\/a> earlier in August.<\/p>\n Yet if Japan\u2019s experience is any indication, that won\u2019t happen anytime soon.<\/p>\n