1 week Ago By Korea Bizwire
Beijing announced last week that it will impose a 34% retaliatory tariff on certain American goods and implement export controls on seven critical rare earth elements. (Image courtesy of Yonhap) SEOUL, April 8 (Korea Bizwire) — The South Korean government is on alert following China’s decision to tighten its grip on rare earth exports and impose retaliatory tariffs in response to new U.S.
trade measures, raising fresh concerns over global supply chain vulnerabilities. Beijing announced last week that it will impose a 34% retaliatory tariff on certain American goods and implement export controls on seven critical rare earth elements. The move came swiftly after Washington’s own 34% tariff hike on Chinese imports, rekindling trade tensions that echo earlier skirmishes during the Trump administration.
The restricted rare earths—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—are vital to industries ranging from electric vehicles and smartphones to aerospace and medical imaging. These elements are used in high-performance magnets, contrast agents, fluorescent materials, and solid-state lasers. China, which accounts for approximately 60% of global rare earth production and nearly 90% of processing capacity, plays a dominant role in this critical sector.
South Korea, like many advanced economies, remains heavily dependent on Chinese rare earth supplies. In response to the escalating trade conflict, South Korea’s Ministry of Trade, Industry and Energy convened an emergency strategy meeting in Seoul on Monday. Officials reviewed domestic rare earth stockpiles and discussed contingency plans in the event of prolonged export disruptions.
“The government is assessing rare earth reserves held by industry stakeholders and preparing appropriate countermeasures,” a ministry official said, noting that precise stockpile figures remain classified for security reasons. The latest Chinese measure differs markedly from a prior action in December 2023, when Beijing banned the export of certain rare earth processing technologies. That move had limited impact on South Korean industries, as it targeted techniques rather than raw materials themselves.
This time, however, the export control applies directly to raw materials and introduces a licensing regime. Export applications will be subject to scrutiny over end-users and intended purposes—raising the risk of supply bottlenecks for downstream industries. China previously implemented a similar system last year for graphite, a key component in EV battery anodes.
While initial fears mounted within Korea’s battery sector, including giants like LG Energy Solution, SK On, and Samsung SDI, China ultimately approved shipments to Korean firms, averting a major disruption. Still, concerns linger. In 2023, Seoul designated 185 critical items, including rare earth permanent magnets, as supply chain priority materials and launched initiatives to reduce dependency on single-source suppliers.
Rare earths used in magnets were also identified as essential to eight strategic industries, triggering expanded stockpiling and support for domestic production. The government aims to raise rare earth reserves from six to eighteen months’ worth of demand, signaling a longer-term strategy to insulate Korean industry from geopolitical shocks. As global trade friction intensifies in 2025 and China signals a willingness to weaponize its resource dominance, South Korea finds itself at the forefront of a widening struggle to secure the raw materials underpinning its technological future.
Ashley Song ( [email protected] ).
