China retaliates against Trump tariffs, blacklists US companies, suspends rare earth exports

China announced sweeping countermeasures on Friday in response to the Trump tariffs, including export bans on rare earth metals and restrictions on American companies operating in sensitive sectors.

Beijing’s actions followed its announcement of 34% retaliatory tariffs on U.S. imports, set to take effect next Thursday. The move mirrors the reciprocal tariffs unveiled a day earlier by U.S. President Donald Trump under his protectionist trade policies, which raise the total tariff rate on some Chinese goods to as high as 54%.

In a further escalation, China added 27 American companies to its export control and “unreliable entities” lists. Among them, 16 firms involved in defense, aerospace, and drone technologies will face restrictions on dual-use exports—goods and technologies that can serve both civilian and military purposes.

The remaining 11 companies, including drone makers Skydio and BRINC Drones, were blacklisted due to their cooperation with Taiwan.

China’s Commerce Ministry said these measures aim to safeguard national security and comply with non-proliferation obligations.

Beijing also launched anti-dumping investigations into certain medical imaging products from the U.S. and India, while U.S. chemical giant DuPont faces an antitrust probe over its operations in China. Additionally, six American companies lost export licenses for poultry and sorghum.

Restrictions on exports of rare earth elements

A key part of China’s retaliation includes limiting exports of strategic rare earth elements such as samarium, gadolinium, and terbium—materials vital for defense systems, semiconductors, electric vehicles, and medical imaging equipment. These materials will now require government approval for export, and shipments suspected of containing them may be seized by customs.

China dominates the global supply of rare earths, producing about 90% of the world’s output. The restrictions underscore its willingness to leverage this dominance amid growing tensions with Washington.

In late 2024, China also banned exports of gallium, germanium, and antimony to the U.S., followed by export controls on graphite, a key input for EV batteries and military technologies.