The US has a big problem. China continues to block rare earth metals
Despite the truce in the trade war between the United States and China concluded in October 2025, the semiconductor industry is still struggling with access to key raw materials. The latest information indicates that suppliers of rare earth metals face significant restrictions that hamper the production of modern integrated circuits, including chips used in 5G networks.
China, unable to produce itself, is also trying to slow down the West
This applies in particular to scandium, which is necessary in the production of systems used in smartphones and base stations. American companies have difficulty obtaining Chinese export licenses because Beijing requires detailed identification of the final recipient of the material. This procedure covers virtually all rare earth metals from China that can be used to produce chips using 14 nm lithography or newer.
The controls were introduced by China in December 2024 but tightened in April 2025 in response to tariffs imposed by Donald Trump. The restrictions apply not only to the raw materials themselves, but also to their processing technology and tools used in the production process. In practice, this means that countries trying to become independent from Chinese supplies cannot quickly make up for the shortcomings.
It is true that China began issuing the first export licenses after the ceasefire was announced, but they are granted to specific recipients, not entire industry sectors. As a result, access to raw materials remains limited and uneven, which forces some American producers to turn to the federal authorities for help.
According to representatives of the US administration, the actions of the Middle Kingdom may be directly aimed at the semiconductor industry, which indicates that this topic will become one of the main points of discussion between the leaders of both countries during the planned meetings at the turn of March and April 2026.
The US and allies are developing the Pax Silica initiative
The current situation has also highlighted the strategic weakness of the United States resulting from its dependence on a single supplier of rare earth metals. In response, the Trump administration plans to create strategic reserves of these raw materials, modeled on US oil reserves created after the energy crisis of the 1970s.
In parallel, the Pax Silica initiative is being developed, which aims to rebuild the global semiconductor supply chain in a way that limits the role of China. More countries have already joined the project, including India, and the Pentagon announced the use of AI systems to set reference prices of rare earth elements, which is intended to counteract potential market manipulations.
