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October 15th, 2025

  • Writer: USCSSO @GWU
    USCSSO @GWU
  • 2 days ago
  • 3 min read

Overview

This week, we discuss China's response to Taiwanese missile defense and government restrictions on the export of Chinese rare earth metals.

Trade

Rare Earth Metals Back on the Table as Trade War Heats Up

By Contributor Jason Holman

 

The Chinese Ministry of Commerce announced the heaviest restrictions on the export of Chinese rare earth metals to date in the latest escalation of the US-China trade war.

The Chinese Ministry of Commerce headquarters in Beijing.  (via  Global Times)


Ministry of Commerce: On Thursday, Oct. 9, China’s Ministry of Commerce announced sweeping restrictions on the export of rare earth minerals in China. Beginning Dec. 1, the restrictions would require foreign companies to secure approval from Beijing to export items containing Chinese rare earth metals or that are manufactured with Chinese mining, smelting, or magnet making. These restrictions have already caused a 3% drop in the S&P 500 and a 5% drop in Nvidia stock. In retaliation, Trump announced reciprocal US tariffs of 100% on all Chinese goods to go into place on Nov. 1.

 

Rare-Earth Capital: China contributes 70% of the world’s rare earth mineral mining, and a further 90% of the world’s processing of rare earth minerals. In comparison, the US remains behind. The US’s only rare earth mine is MP Materials’ California mine, which still relies on China for the processing of the minerals it mines. China has used its dominance in the rare earth mineral market before for trade negotiations. In April, China restricted the export of 7 rare earth minerals. This led the US in June to drop its threatened restrictions on jet engine technology and chip software sharing to China. Now approaching planned dialogues between Trump and Xi, China has, in addition to announcing these future restrictions, added 5 new minerals to its list of restricted rare earth minerals.


Game of Chess: The US has attempted to strengthen its own rare earth capabilities in response to China’s overwhelming dominance. US MP Materials started producing rare earth magnets in their new manufacturing plant in Texas, and in July, the US Defense Department agreed to invest $400 million in the company. This year has been characterized by the ongoing trade war between the US and China. Both countries Oct. 14 will charge ships that dock in the other country's ports. Both countries are continuing to strengthen their bargaining positions against one another in the lead-up to Xi and Trump’s planned meeting at the end of October.

Defense

Taiwan’s National Day: Missile Defense and Chinese Bounties

By Contributor Jason Holman


On Taiwan’s National Day, Taiwanese President William Lai announces the construction of a “T-Dome” for defense, and China follows with a bounty on Taiwanese citizens.

Taiwanese President William Lai among Taiwanese military officers on Taiwan’s National Day Oct. 10 2025.  (via  ABC News)


Xiamen: On Oct. 11, Xiamen police released the names, photos, and ID numbers of 18 Taiwanese citizens accused of engaging in ‘psychological operations’ in China. The city announced 10,000 Yuan for people with information leading to the arrest of any of the 18 people accused of spreading ‘separatist messages’ and working for Taiwan’s Psychological Warfare Department. This comes after Taiwan’s President William Lai announced plans to accelerate the construction of a “Taiwan Shield” or “T-Dome” to defend Taiwan from external attacks. 


Taiwanese Defense: On Taiwan’s National Day, Oct. 10, which commemorates the 1911 founding of the Republic of China, William Lai announced intentions to increase Taiwan’s defensive capabilities. Lai announced the creation of a “T-Dome” in Taiwan focused on missile interception, similar to Israel’s Iron Dome. It also lays the foundation for integrating AI into a large defense system. Lai also announced intentions to increase Taiwan’s defense budget by 3% of the country's GDP in 2026 and by 5% by 2030. Taiwan’s defense has been a central focus of Lai’s administration since he entered office in 2024, with him increasing Taiwanese military service from 4 months to 1 year, boosting arms purchases, and raising defense spending. Lai’s defensive moves have been seen as the actions of a “warmonger” by China, and the Taiwanese opposition accuses him of using fear to shore up support.


Growing Pressures: Lai’s announcement comes after the US calls on Oct. 7 for Taiwan to strengthen its defensive capabilities and to increase its defense budget by 10% of its GDP. Further, it follows a year of increased threats across the strait by China’s military. On Oct. 9, Taiwan’s Defense Ministry's 2025 Defense Report found that 2025 had the largest number of incursions across the Taiwan Strait by Chinese flights and PLA sorties. In April, China held a large military exercise near Taiwan alongside other repeated drone incursions in early September. US reports claimed that Beijing planned to invade Taiwan by 2027 as it views Taiwan as a rogue province. As the new year arrives, there will likely be greater tensions across the strait.


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