China has signalled for more than 15 years that it was looking to weaponise areas of the global supply chain, a strategy modelled on longstanding American export controls Beijing views as aimed at stalling its rise…The scramble in recent weeks to secure export licences for rare earths, capped by Thursday's telephone call between U.S. and Chinese leaders Donald Trump and Xi Jinping, shows China has devised a better, more precisely targeted weapon for trade war…Industry executives and analysts say while China is showing signs of approving more exports of the key elements, it will not dismantle its new system…"China originally took inspiration for these export control methods from the comprehensive U.S. sanctions regime," said Zhu Junwei, a scholar at the Grandview Institution, a Beijing-based think tank focused on international relations…"China has been trying to build its own export control systems since then, to be used as a last resort."…China holds a near-monopoly on rare earth magnets, a crucial component in EV motors…Several European auto suppliers shut down production lines this week after running out of supplies. While China's April curbs coincided with a broader package of retaliation against Washington's tariffs, the measures apply globally…Fears that China could weaponise its global supply chain strength first emerged after its temporary ban of rare earth exports to Japan in 2010, following a territorial dispute…As early as 1992, former Chinese leader Deng Xiaoping was quoted as saying, "The Middle East has oil, China has rare earths."…In 2022, the United States put sweeping curbs on sales of advanced semiconductor chips and tools to China over concerns the technology could advance Beijing's military power…Beijing punched back a year later by introducing export licenses for gallium and germanium, and some graphite products. Exports to the United States of the two critical minerals, along with germanium, were banned last December…In February China restricted exports of five more metals key to the defence and clean energy industries.

U.S. President Donald Trump and Chinese leader Xi Jinping confronted weeks of brewing trade tensions and a battle over critical minerals in a rare leader-to-leader call on Thursday that left key issues to further talks…During the more than one-hour-long call, Xi told Trump to back down from trade measures that roiled the global economy and warned him against threatening steps on Taiwan, according to a Chinese government summary…The highly anticipated call came in the middle of a dispute between Washington and Beijing in recent weeks over "rare earths" minerals that threatened to tear up a fragile truce in the trade war between the two biggest economies. It was not clear from either countries' statements that the issue had been resolved…Since returning to the White House in January, Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives…China's decision in April to suspend exports of a wide range of critical minerals and magnets continues to disrupt supplies needed by automakers, computer chip manufacturers and military contractors around the world…Beijing sees mineral exports as a source of leverage - halting those exports could put domestic political pressure on the Republican U.S. president if economic growth sags because companies cannot make mineral-powered products…In recent years, the United States has identified China as its top geopolitical rival and the only country in the world able to challenge the U.S. economically and militarily…The talks are being closely watched by investors worried that a chaotic trade war could disrupt supply chains in the key months before the Christmas holiday shopping season. Trump's tariffs are the subject of ongoing litigation in U.S. courts.