How China’s rare earth restrictions could disrupt the U.S. defense industry and reignite a trade war
China sweeping restrictions on rare earth exports threaten the U.S. defense industry, providing President Xi Jinping with a powerful leverage over President Donald Trump in upcoming trade talks.
Beijing will not allow the export of rare earth materials for use by foreign militaries, China’s Ministry of Commerce announced on Oct. 9. These are the first restrictions imposed by China that specifically target the defense sector, according to Gracelin Baskaran, a critical minerals expert at the Center for Strategic and International Studies.
“What this essentially means is that it will deny licenses to foreign militaries and companies that are producing military use end goods,” Baskaran told CNBC. “It undermines the development of the defense industrial base at a time when there is rising global tension. It is a very powerful negotiating tactic because it undermines national security.”
Rare earth magnets are crucial components in U.S. weapons systems such as the F-35 warplane, Virginia and Columbia class submarines, Predator drones, Tomahawk missiles, radars, and the joint direct attack munition series of smart bombs, according to the Department of Defense.
China dominates the global supply chain for rare earths. It controls 60% of mining and more than 90% of refining worldwide, according to the International Energy Agency. The U.S. is dependent on China for around 70% of its rare earth imports, according the U.S. Geological Survey.
“It’s scandalous that we don’t have a rare earths strategic reserve, that we let China monopolize 90% of the refining of rare earth materials,” Jeremy Siegel, University of Pennsylvania professor emeritus of finance, told CNBC on Monday. “Where were we?”
‘Massively disruptive’
Beijing also imposed broad controls that require foreign companies to obtain an export license if rare earths processed in China make up as little as 0.1% of their products’ value. Firms also need licenses for products that rely Chinese rare earth technology for mining, smelting, separation, magnet manufacturing and recycling.
“If these rules were to be strictly and indefinitely enforced, they would be massively disruptive, not just to the US but globally,” Wolfe Research analyst Tobin Marcus told clients in an Oct. 10 note. Rare earths are also also crucial inputs for the semiconductor and automobile industries.
The restrictions would impact every sector of the U.S. economy but the defense, semiconductor and electric vehicle industry would face the brunt, according to Alicia Garcia Herrero, an economist at French investment bank Natixis. Defense contractors, Apple, Nvidia, Intel, Tesla, Ford and GM are all highly exposed, Hererro told clients in a Monday note.
The Trump administration is working to build out a domestic supply chain. The Defense Department struck an unprecedented deal with the largest U.S. rare earth miner MP Materials in July that included an equity stake, price floors and an offtake agreement.
“This will certainly also further accelerate US efforts to develop our own rare earth resources,” Marcus said. U.S. rare earth stocks have surged as investors speculate that the Trump administration will strike deals with other miners.
Standoff in South Korea
The restrictions threaten to reignite the trade war between the China and the U.S. after months of relative calm.
Trump has responded with 100% tariffs on Chinese goods starting Nov. 1. The huge import taxes would come on top of the 44% tariff rate already in place on China, effectively cutting off trade between the world’s two largest economies, according to Wolfe Research.
“It wouldn’t take much re-escalation to get us back to the quasi-embargo situation that prevailed in the spring,” Marcus told clients.
The U.S. stock market erased about $2 trillion in value Friday after Trump threatened massive tariffs against China, according to Bespoke Investment Group. The S&P 500 rallied Monday to regain more than half of Friday’s losses after Trump appeared to de-escalate, saying “it will all be fine” with China.
Trump and Xi are still expected to meet on the sidelines of the Asia-Pacific Economic Cooperation summit in Seoul, South Korea later this month, Treasury Secretary Scott Bessent told Fox Business on Monday.
The most likely scenario is “both sides pull back on the most aggressive policies and that talks lead to a further—and possibly indefinite—extension of the tariff escalation pause reached in May,” Goldman Sachs told clients Sunday.
But Beijing’s strategy is unclear and the tariff deadline is just weeks away, raising the risk that an agreement might not be struck in time, Marcus said.
“Without more conviction about Beijing’s strategy here, we’re concerned that they won’t be willing to back down fast enough to prevent these 100% tariffs from kicking in, at least temporarily,” the analyst said.
Dario Amodei, co-founder and chief executive officer of Anthropic, at the World Economic Forum in 2025.
Stefan Wermuth | Bloomberg | Getty Images
Artificial intelligence startup Anthropic is doing all it can to keep pace with larger rival OpenAI, which is spending money at a historic pace with backing from Microsoft and Nvidia. Of late, Anthropic has been facing an equally daunting antagonist: the U.S. government.
David Sacks, the venture capitalist serving as President Donald Trump’s AI and crypto czar, has been publicly criticizing Anthropic for what he’s called a campaign by the company to support “the Left’s vision of AI regulation.”
After Anthropic co-founder Jack Clark, AI startup’s head of policy, wrote an essay this week titled “Technological Optimism and Appropriate Fear,” Sacks lashed out against the company on X.
“Anthropic is running a sophisticated regulatory capture strategy based on fear-mongering,” Sacks wrote on Tuesday.
OpenAI, meanwhile, has established itself as a partner to the White House since the very beginning of the second Trump administration. On Jan. 21, the day after the inauguration, Trump announced a joint venture called Stargate with OpenAI, Oracle and Softbank to invest billions of dollars in U.S. AI infrastructure.
Sacks’ criticism of Anthropic hits on the company’s very foundation and its original reason for being. Siblings Dario and Daniela Amodei left OpenAI in late 2020 and started Anthropic with a mission to build safer AI. OpenAI had started as a nonprofit lab in 2015, but was rapidly moving towards commercialization, with hefty funding from Microsoft.
Now they’re the two most highly valued private AI companies in the country, with OpenAI commanding a $500 billion valuation and Anthropic capturing a valuation of $183 billion. OpenAI leads the consumer AI market with its ChatGPT and Sora apps, while Anthropic’s Claude models are particularly popular in the enterprise.
When it comes to regulation, the companies have very different views. OpenAI has lobbied for fewer guardrails, while Anthropic has opposed part of the Trump administration’s effort to limit protections.
Anthropic has repeatedly pushed back against efforts by the federal government to preempt state-level regulation of AI, most notably a Trump-backed provision that would have blocked such rules for 10 years.
That proposal, part of the draft “Big Beautiful Bill,” was ultimately abandoned. Anthropic later endorsed California’s SB 53, which would require transparency and safety disclosures from AI companies, effectively going in the opposite direction from the administration’s approach.
“SB 53’s transparency requirements will have an important impact on frontier AI safety,” Anthropic wrote in a blog post on Sept. 8. “Without it, labs with increasingly powerful models could face growing incentives to dial back their own safety and disclosure programs in order to compete.”
Anthropic didn’t provide a comment for this story. Sacks didn’t respond to a request for comment.
U.S. President Donald Trump sits next to Crypto czar David Sacks at the White House Crypto Summit at the White House in Washington, D.C., U.S., March 7, 2025.
Evelyn Hockstein | Reuters
For Sacks, the priority in AI is to innovate as fast as possible to make sure the U.S. doesn’t lose to China.
“The U.S. is currently in an AI race, and our chief global competition is China,” Sacks said in an onstage interview at Salesforce’s Dreamforce conference in San Francisco this week. “They’re the only other country that has the talent, the resources, and the technology expertise to basically beat us in AI.”
But Sacks has adamantly denied that he’s trying to take down Anthropic in the process of lifting up U.S. AI.
In a post on X on Thursday, Sacks contested a Bloomberg story that linked his comments to growing federal scrutiny of Anthropic.
“Nothing could be further from the truth,” he wrote. “Just a couple of months ago, the White House approved Anthropic’s Claude app to be offered to all branches of government through the GSA App Store.”
Rather, Sacks claimed that Anthropic has cast itself as a political underdog, positioning its leadership as principled defenders of public safety while pursuing a public campaign that frames any pushback as partisan targeting.
“It has been Anthropic’s government affairs and media strategy to position itself consistently as a foe of the Trump administration,” Sacks said. “But don’t whine to the media that you’re being ‘targeted’ when all we’ve done is articulate a policy disagreement.”
Sacks pointed to several examples of what he sees as adversarial actions. He referenced Dario Amodei’s comparison of Trump to a “feudal warlord” during the 2024 election. Amodei publicly supported Kamala Harris’ campaign for president.
Sacks also referenced op-eds the company ran opposing key parts of the Trump administration’s AI policy agenda, including its proposed moratorium on state-level regulation and elements of its Middle East and chip export strategy. Anthropic also hired senior Biden-era officials to lead its government relations team, Sacks noted.
The AI czar took particular umbrage to Clark’s essay and his warnings about the potentially transformative and destabilizing power of AI.
“My own experience is that as these AI systems get smarter and smarter, they develop more and more complicated goals. When these goals aren’t absolutely aligned with both our preferences and the right context, the AI systems will behave strangely,” Clark wrote. “Another reason for my fear is I can see a path to these systems starting to design their successors, albeit in a very early form.”
Sacks said such “fear-mongering” is holding back innovation.
“It is principally responsible for the state regulatory frenzy that is damaging the startup ecosystem,” Sacks wrote on X.
Anthropic has also stayed away from actions that many other tech companies have taken explicitly to appease Trump.
Leaders from Meta, OpenAI, and Nvidia have courted Trump and his allies, attending White House dinners, committing tens of billions of dollars to U.S. infrastructure projects, and softening their public postures. Amodei wasn’t invited to a recent White House dinner involving numerous industry leaders, the company confirmed to The Information.
Still, Anthropic continues to hold major federal contracts, including a $200 million deal with the Department of Defense and access to federal agencies through the General Services Administration. It also recently formed a national security advisory council to align its work with U.S. interests, and began offering a version of its Claude model to government customers for $1 per year.
But Sacks isn’t the only influential Republican tech investor voicing his critique of the company.
Keith Rabois, whose husband works in the Trump administration, waded into the mix this week.
“If Anthropic actually believed their rhetoric about safety, they can always shut down the company,” Rabois wrote on X. “And lobby then.”
Italian logistics specialist Fratelli Foppiani Trasporti has become one of the first operators to deploy the new MAN eTGX electric trucks, taking delivery of a 4×2 semi tractor and a new, 6×2-4 rigid truck packing absolutely MASSIVE battery packs that are ready to get to work.
The Italian shipping firm ordered its MAN units back in 2023, making these among the first regular-production electric trucks from the German truck brand to be delivered to customers. The trucks seem to have been worth the wait, too – the 6×2-4 rigid unit packs a whopping 445 kWh modular battery pack while the 4×2 semi arrived with a massive 534 kWh pack, along with MAN SafeStop Assist, MAN OptiView digital mirrors, GM cab, regenerative braking system, TipMatic 4 semiauto transmission, and MAN Digital Services packages.
Those batteries will give the eTGX trucks more than enough range to handle Fratelli Foppiani’s existing 4×2 routes, which go primarily from Corsico (Milan), with routes including Rozzano, Voghera and Brescia. The rigid truck will operate from Busto Arsizio (Varese), serving areas across Milan and Bergamo, Italy.
“This delivery represents a fundamental step forward for sustainable transport in Italy,” said Marc Martinez, Managing Director MAN Truck & Bus Italia. “We are proud to have achieved it together with a long-standing partner such as Fratelli Foppiani, which has once again demonstrated vision and courage.”
The trucks were delivered during a ceremony at the company’s Corsico headquarters this month, coinciding with the company’s 65th anniversary.
Electrek’s Take
MAN Trucks’ fleet advisors believe that, in most cases, an electric semi will pay for itself in about three years, thanks in part to Europe’s much higher diesel fuel prices compared to the US (about $6.80/gal compared to $3.70 here, last time I checked).
Doing that complicated fleet assessment math for me, while giving me one of the best headlines in the industry, is just one more reason I love these guys.
SOURCE | IMAGES: MAN Truck & Bus Italia.
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In the increasingly posh world of premium folding electric bikes, one British company is putting its tongue firmly in its cheek – and maybe a few fish eggs on your toast – to highlight what it sees as the absurdity of e-bike pricing.
FLIT, a Cambridge-based folding e-bike maker, just announced a new bundle deal pairing its lightweight FLIT M2 e-bike with a half-kilo tin of high-grade caviar. The price? £5,800 (that’s around €6,700 or US $7,800) – the same as a certain newly launched titanium competitor across town.
The not-so-subtle jab is aimed squarely at Brompton’s just-released Electric T Line, a beautiful machine to be sure, but one that comes with a premium price tag despite only being about half a kilogram lighter than FLIT’s own M2. That’s a £3,300 price difference — or, as FLIT puts it, about £7 per gram of weight saved.
“If that’s the going rate for weight savings, we figured we’d throw in something else that sells for £7 a gram,” said FLIT co-founder Alex Murray, referring to the delicacy from Fortnum & Mason’s, a luxury caviar. “Given the cost of living right now, we decided to give commuters what they’re clearly calling for: a folding e-bike and a tin of caviar to power their ride.”
Humor aside, FLIT is making a serious point about premium e-bike design and the seemingly crazy price inflation in the high-end electric bike market. The FLIT M2 weighs just 14.5 kg or 32 lb (that’s with the battery) and was engineered from the ground up as a purpose-built e-bike – not a retrofit of an existing frame. It uses aerospace-grade adhesive bonding instead of welding and is hand-assembled in Cambridge. The result is a compact, cleanly integrated bike that folds down small without the need for pricey materials like titanium.
And while it might not be carbon-fiber light or titanium-trimmed, the M2 still packs good commuter specs: 250W rear hub motor (the legal limit in much of Europe), 230Wh integrated battery, hydraulic disc brakes, and a 50 km (31 mile) range. Plus, it starts at just £2,499 (approximately €2,900 or US$3,400). That’s roughly the price of two M2s and a weekend away, compared to the high-end rival they’re not so gently poking in the ribs.
FLIT says its goal is to make fast, flexible urban mobility more accessible. And while they’re clearly having fun with the marketing, they’re also making a solid case that you don’t have to choose between high-end engineering and a reasonable price tag.
“Oh, and I’m serious about the caviar,” added Murray. “Call us.”
Electrek’s Take
Alright, this is pretty silly, but I like the point they’re making. And it’s worth pointing out how this isn’t just an exercise in comparing a budget bike to a premium bike. The FLIT M2 is very much a high-end bike in its own right. I test rode an earlier version last summer and called it “The e-bike Brompton should have built” at the time.
The engineer in me appreciates the exotic materials in Brompton’s latest machine, but as a city commuter with rent to pay, I just can’t fathom the price tag. So if a well-made and equally performing folding commuter e-bike can do the job for less than half the price (or the same price with a bucket of expensive caviar thrown in), that gets my attention!
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