Breaking news:China has a powerful card to play in its fight against Trump’s trade war :see more

Less than a year into Donald Trump’s first trade war with China, Chinese leader Xi Jinping made a high-profile visit to an unassuming factory in Ganzhou, an industrial city nestled among rolling hills in the country’s southeast.

Touring its exhibition hall in 2019, Xi examined row upon row of unremarkable gray metal blocks and declared to his entourage of Communist Party officials: “Rare earths are a vital strategic resource.”

For decades, the US and other countries have been dependent on Beijing’s supply of these processed metals. China accounts for 61% of global mined rare earth production, but its control over the processing stage is 92% of the global output, according to the International Energy Agency.

On April 4, after years of veiled warnings, the Chinese government placed export restrictions on seven types of rare earth minerals, as part of its retaliation against Trump’s initial 34% “reciprocal” tariffs on Chinese goods. The new rules require all companies to secure government permission to export the seven minerals as well as associated products, such as magnets.

It’s China showing that it can exert incredible economic might by being strategic … and surgical and really hitting American industry right where it hurts,” said Justin Wolfers, a professor of economics and public policy at the University of Michigan.

On Tuesday, Trump ordered a probe into potential tariffs on critical minerals, a broader category of resources that include rare earth elements, to evaluate the impact of these imports on America’s security and resilience.

“The dependence of the United States on imports and the vulnerability of our supply chains raises the potential for risks to national security, defense readiness, price stability, and economic prosperity and resilience,” Trump said in an executive order.

Since the first Trump administration, the US has been trying to play catch-up and build up its own domestic rare earths supply chain. Three American rare earth industry companies told CNN that they are in the process of expanding production capacities and sourcing materials from US allies and partners.

But those efforts will take years to meet the