Global Risk Data: Intelligence Events

BLOG — Apr 25, 2025 Materials supply chains face critical mass of import reviews and export restrictions By Chris Rogers, Ines Nastali, and Eric Oak The US government has launched a review of the critical minerals sector, utilizing the Section 232 “national security” mechanism under the 1962 Trade Expansion Act. The action follows the invocation of the Defense Production Act by the Trump administration with regard to critical minerals in March 2025 to determine policies to boost US production. Should the Section 232 recommend the use of tariffs, these would replace the duties applied under the International Emergency Economic Powers Act or IEEPA (deficit) reciprocal tariff program, as has been the case for other products subject to Section 232 reviews. Section 232 recommendations do not just include tariffs. Other outcomes could include: a renewed focus on partnerships with other countries; securing mineral purchases overseas (for example as has been reported for sources in Ukraine or Greenland); providing buyer-of-last-resort services to unlock financing for US projects; or developing new resources such as seabed resources. The timing of the new action is synchronous with the launch of reviews of electronics and pharmaceuticals and comes amid reports that mainland China has terminated exports of rare earths in the wake of new export control rules. The new set of restrictions imposed by the mainland Chinese government include stricter export controls for seven materials used in electric vehicle and energy storage products, with the government citing aims “to better safeguard national security and interests and fulfill international obligations such as non-proliferation” of dual-use products. Mainland China also recently expanded dual-use export controls on a full range of critical minerals, earlier restrictions on exports of antimony, graphite, gallium, germanium and more. The government has also restricted the export of technologies for refining and processing rare earth materials. Learn more about our insights and data In terms of confirmed data, mainland China’s exports of rare earths fell by 24.9% year over year in March after a 24.6% decline in February. An exception to the recent decline was a one-off large-scale shipment to the US in November and January, potentially reflecting concerns about the implementation of tariffs and other restrictions. Regulations aside, mainland China’s exports of rare earths have been steadily declining since mid-2023, which may reflect a slip in demand for electric vehicles. What is a critical mineral? The precise product coverage of the review will be determined after the initial consultation period, though the enacting orders indicate it will be based on the US Geological Survey (USGS) list, which includes 50 materials. The orders also refer to coverage of materials that include “transportation and energy to telecommunications and advanced manufacturing” as well as being “foundational to America’s national security.” The uncertainties over coverage and policy outcomes may lead to a surge in imports of materials ahead of tariffs combined with a pause in investment in new capital projects both in the US and overseas, where the US is an identified export market. 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. Many of the materials likely to be covered also received exemptions from the reciprocal tariff list as noted above due to their criticality, which covered 49 materials. The review presumably won’t cover products subject to other Section 232 reviews which includes aluminum — where tariffs were recently extended — or copper, where a study has recently been launched. The consultation process will likely refine which materials are included, 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. The review will focus on processed materials and derived products, rather than raw materials, where there is little direct ability for the Trump administration to affect change without securing new geographies. S&P Global Market Intelligence’s assessment of 34 materials that meet defense, energy transition or electronics requirements shows the US imported US$11.9 billion of materials in 2024, led by uranium (sourced from the EU, UK and Canada) and rhodium (led by the EU and South Africa). For the remaining amount, most of the other critical processed materials, mainland China is a leading supplier including rare earths, tantalum, graphite and antimony. The effective share is likely higher as it also supplies early-stage materials to the EU and others who are also major suppliers of the processed materials and products. South Africa is also a major supplier of iridium/ruthenium and rhodium, where relations have been complicated by issues linked to South Africa’s expropriation legislation, showing the complications for supply chains stemming from conflicting geopolitical objectives. Sign up for our Supply Chain Essentials newsletter 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. Power plays Key economic, geopolitical and supply chain drivers for 2025 Request Full Report Insights and analysis to empower confident decisions The Decisive podcast is here to provide you with the knowledge you need to stay ahead. Listen now