The clock is ticking before a tenuous U.S.-China trade truce expires this fall, and the countdown has left U.S. President Donald Trump increasingly desperate to ditch Chinese rare earths once and for all.
Few world powers understand that feeling quite like Japan. After all, the country has been in Washington’s shoes before: China shocked the world in 2010 when it halted rare-earth shipments to Japan over a geopolitical spat, driving a supply chain reckoning in Tokyo.
Sixteen years later, Japan is often hailed as the country that has most successfully diversified away from Chinese rare earths. Yet it is far from out of the woods.
In apparent retaliation against Japanese Prime Minister Sanae Takaichi’s remarks about Taiwan last year, Beijing has again unleashed its supply chain might against Japan. The pressure campaign is still going: Customs data released last month showed that Beijing continued to strangle its flows of key rare earths to Japan in June, and firms and manufacturers across the country are feeling the pain.
As Washington follows in Tokyo’s footsteps, the latter offers a window into just how challenging it can be to break free of Beijing’s chokehold—with stark lessons for U.S. policymakers.
“Japan is a cautionary tale,” said Gracelin Baskaran, a mining economist at the Center for Strategic and International Studies (CSIS).
One of the most formidable weapons in China’s trade arsenal has been its chokehold over global supply chains of rare earths, the elements that underpin powerful technologies ranging from fighter jets to wind turbines.
China dominates around 85 percent of rare-earth processing and 92 percent of magnet production. Its command is particularly pronounced when it comes to the industrial separation of a subset of rare earths known as heavy rare earths—giving it immense leverage over other countries.
That became clear in 2010, when China briefly halted rare-earth exports to Japan. Alarmed, Tokyo waged an all-out effort to plug its supply chain vulnerabilities, including by building stockpiles and inventories, pumping vast sums of money into the sector, and embracing public-private partnerships and off-take agreements.
Tokyo’s efforts have spanned the globe. Japan has poured hundreds of millions of dollars into Lynas, an Australian firm that recently became the first to successfully produce heavy rare earths outside of China. Japanese auto manufacturers have also turned abroad, with a raft of rare-earth agreements with countries ranging from Canada to Australia.
“Japan sees this as a network strategy, that you cannot solve this puzzle on your own,” said Mireya Solís, an expert on Japanese foreign economic policy at the Brookings Institution.
By 2018, Japan had cut its dependence on Chinese rare-earth imports to around 58 percent. Yet it remains the world’s biggest importer of rare-earth metals, according to a CSIS report that was co-authored by Baskaran. Even as Tokyo has cut its dependence on Beijing, it imports substantial quantities of rare-earth metals from countries whose industries are deeply intertwined with China, such as Vietnam, the report noted.
The report’s verdict was blunt: “Claims that Japan has successfully de-risked its rare earth supply chains and reduced reliance on China are misguided.” Indeed, after China imposed broad curbs on certain rare-earth elements and magnets in 2025, some Japanese automakers were forced to suspend production.
Rare-earth access remains “the big Achilles’ heel for Japan,” said Jane Nakano, an expert in energy security at CSIS.
It has been difficult for Japan to secure supplies of heavy rare earths, which are particularly complicated to find and separate, according to Tom Moerenhout, who leads the Critical Materials Initiative at Columbia’s Center on Global Energy Policy. Since rare earths mineralize together in nature and are chemically similar, separation is required to isolate individual elements, although the process carries environmental risks.
“In terms of the heavy rare earth ones—and then specifically dysprosium—they are still very much reliant on China,” Moerenhout, referring to a type of heavy rare earth. “For this particular rare earth, Japan has been doing every move correctly to diversify, but it just shows how long it takes to actually achieve the results on the ground.”
Beijing has used that to its advantage. Tensions between both countries soared last November after Takaichi remarked that a potential blockade or seizure of Taiwan would constitute a “survival-threatening situation” for Japan—and thereby authorize Japanese military action. Months later, China strangled its exports of rare earths and magnets to the country.
For Japanese firms, the ongoing pressure campaign has been painful. While inventories and stockpiles have helped cushion the shock, months of disruption have taken their toll, so much so that the Trump administration reportedly went as far as to ask Beijing—unsuccessfully—to resume flows to Japan in June.
Many companies are going into “absolute contingency mode,” Moerenhout said.
Take Shin-Etsu, a major Japanese magnet maker, which reportedly stopped taking new orders for magnets with dysprosium and has announced plans to build a new refining facility. Japanese automaker Mitsubishi, which reportedly only has enough rare-earth stocks to last through mid-2026, recently partnered with the American firm ReElement Technologies to jointly advance a supply chain.
And more businesses have been sounding the alarm. Of the 200 filings that mentioned rare earths to the Tokyo Stock Exchange in May and June, more than two-thirds warned that China’s export controls were having a negative impact or threatened to do so, Reuters reported.
The Japanese government has also ramped up its efforts globally, with Takaichi recently spearheading a proposal among the G-7 to cooperate on critical mineral stockpiles to jointly counter China. Tokyo is also increasingly looking underwater, with big ambitions of partnering with the United States to exploit rare earths in the deep sea.
But for all those efforts, the real test may be whether Japanese firms can withstand China’s continued squeeze.
“It’s again the question of how long can they sustain this, and it’s not clear,” Solís said.
Japan’s trials and tribulations may offer a warning for Washington as it embarks on its own journey to ditch Chinese rare earths.
After the Trump administration unveiled steep tariffs on much of the world in 2025, China struck back in part by announcing its own rare earth curbs. After several rounds of other escalations and high-level trade talks, both sides agreed to a one-year trade truce that saw Beijing temporarily suspend its rare-earth export controls.
That truce is set to expire in November, with Trump and Chinese President Xi Jinping expected to meet in the United States in September. Ahead of both dates, rare earths have been top of mind for U.S. officials, who pressed the issue in a meeting with their Chinese counterparts in July.
“In our discussion, I emphasized that we expect Beijing to fully meet its commitments on rare earths and U.S. agricultural products,” U.S. Treasury Secretary Scott Bessent said in a post on X.
Critical mineral security has been a top priority for the Trump administration, both domestically and abroad. Among other measures, Washington has ordered U.S. manufacturers to stop sourcing rare earths, magnets, and select other minerals from China by the end of this year, although it remains unclear whether they will be able to meet that deadline.
Eager to secure new supply chains, the White House has embraced equity stakes in mining firms; turbocharged federal support for the sector; inked deals abroad, including with Tokyo; announced a $12 billion stockpile; pitched a global minerals trading bloc; and attempted to strongarm minerals from other places.
The Trump administration’s campaign kicked into overdrive this month with $3 billion in new investments aimed at boosting domestic production and U.S. mining schools. “We’re reclaiming America’s rightful place as the minerals superpower of the world,” Trump declared earlier in August.
Yet if Japan’s experience is any indication, that won’t happen anytime soon.
That’s because with rare earths, self-sufficiency is a long and capital-intensive journey, Baskaran said. One reason is the amount of time that it takes to build a mine: It takes an average of 29 years in the United States, which is the world’s second-longest mine development timeline.
There’s also the technological challenge. Rare-earths separation is highly complex, with upward of 50 stages of separation, Baskaran said. Much of the U.S. government’s current efforts revolve around supporting new rare-earth processing technologies, many of which are in the pilot stage, she added.
“You’re developing new mines and developing new technology at the same time, and that’s not an overnight task,” Baskaran said.
For both Tokyo and Washington, the race to diversify away from Beijing is in full swing. But it will take time to break free.
“We don’t know how China will press its advantage, what concessions it may want to continue with the suspension,” Solís said. “But the fact is that the system has been established. We cannot unsee it.”