By Elaine Kurtenbach, Associated Press Business Writer
BANGKOK (AP) — China’s National Security Agency says it is cracking down on allegations of rare earth mineral smuggling, which it says is threatening national security, weeks after Beijing and Washington agreed to facilitate materials essential to American companies from China for manufacturing and computer chip production.
In a report released Friday in the state newspaper Global Times, the Department of Security said foreign “spying and intelligence reporting agencies” were conspiring to steal rare earth-related goods by reattacking rare metals and making them relatable to hide Chinese origins.
In some cases, the mineral was mistakenly labelled as something like “solder paste,” and mixed with other materials such as ceramic tiles, or falsely declared as hidden in plastic mannequins or bottled water.
It only referred to “specific countries” that were not named, saying they lacked the ability to create and refine their own rare earths.
The investigation found Chinese offenders involved, saying it would use shipping and delivery channels to avoid control over exporting materials used in many high-tech applications, including electric vehicle batteries.
The crackdown, following a Reuters report earlier this month, detailed the rare earth being transported to the US via Thailand and Mexico.
China is a major source of many strategically important rare earths, and has moved to slow the export of such minerals due to the sudden import duties imposed on Chinese goods since President Donald Trump returned to the White House and launched a crusade to overturn a global trading system that he says is unfair to the US and its workers.
It followed a previous series of restrictions by Beijing on the export of materials such as gallium, germanium, antimony and tungsten, in response to trade frictions with the management of then-President Joe Biden.
In April, Beijing imposed permit requirements on seven rare earth elements under Chinese law, which applies to all exports, not just those bound by the US market.
The permit process takes 45 days, and new requirements threaten to suspend cargo and disrupt production of cars, robots, wind turbines and other high-tech products in the US and around the world. Meanwhile, the US has been added to restrictions on exporting advanced technologies to China.
The rare earth remains at the heart of China-US talks aimed at avoiding the massive increase in tariffs that was postponed to May, allowing time to negotiate a broader trade deal. The deadline for reaching the transaction is August 12th.
The agreement, announced in late June, did not remove China’s permit requirements for rare earths, but Beijing agreed to the flexibility to dial up or down the approval process if necessary.
Computer chips are another important bone of competition.
China’s Commerce Department said on Friday it had taken note of the Trump administration’s decision to lift restrictions on exports of major semiconductors used in artificial intelligence and its rivals’ advanced microdevice.
In April, the Trump administration announced that it would limit sales of NVIDIA H20 chips to China and limit AMD’s MI308 chips.
But Commerce Department spokesman Wang Wentao said more action will be required by Washington to restore healthy trade relations.
The US export controls of ascend chips, created by Chinese high-tech giant Huawei technology, have hurt the interest of Chinese companies, Wang told reporters in Beijing.
“We hope that the US and China will meet along the way to correct wrong practices through equal consultation, create a good environment for mutually beneficial cooperation between both companies, and jointly maintain global semiconductor production and supply chain stability,” he said.
Original issue: July 18, 2025 8:02am EDT
