China has banned the export of several rare earth minerals to Japan following controversial comments by Japan’s prime minister about Taiwan, deepening tensions between the two major trade partners. In a statement released Tuesday, China’s commerce ministry said it is immediately restricting exports of certain dual-use items — including rare earth elements that can serve both civilian and military purposes.
The move comes after Japanese Prime Minister Sanae Takaichi said in November 2025 that a potential Chinese attack on Taiwan could pose a direct threat to Japan’s survival, calling a Taiwan crisis a matter for both Japan and its alliance with the United States. China, which views Taiwan as part of its territory, demanded that the remarks be withdrawn, but Tokyo stood by its position — triggering what appears to be a series of retaliatory measures from Beijing.
Japan strongly condemned the export ban, calling it unfair and outside international norms. Chief government spokesman Minoru Kihara said targeting Japan alone with such restrictions was unacceptable and deeply regrettable.
The impact could be significant. Japan still relies on China for about 60% of its rare earth imports and is almost entirely dependent on Beijing for certain heavy rare earths used in electric and hybrid vehicle motors. Economists warn that even a short-term restriction could hit Japan’s economy hard, with estimates suggesting a three-month ban could shave 0.11% off GDP and cost businesses billions of yen, while a year-long cutoff could cause even greater damage.
China’s leverage comes from its dominance in the rare earth sector. It controls roughly 70% of global mining and more than 90% of processing, refining, and magnet production — giving it immense influence over supply chains critical to defense, electric vehicles, and advanced technology.
In response, countries like Japan and the United States are accelerating efforts to reduce dependence on China. The US has invested heavily in domestic production and recycling, including a major partnership with MP Materials to build a secure supply chain. Tech firms are also exploring new ways to recover rare earths from electronic waste, while Washington has strengthened partnerships with allies across the Indo-Pacific to diversify sourcing and processing.
Despite ongoing political friction, China and Japan remain deeply intertwined economically, especially in electronics, machinery, and automotive manufacturing — making the latest escalation not just a diplomatic clash, but a serious test for global supply chains.