U.S. Launches Section 232 Investigation into Critical Minerals

On April 15, the White House announced that President Trump has signed an executive order formally launching a Section 232 investigation into critical minerals and their derivatives. This move signals a potential new wave of tariffs targeting Chinese-origin rare earths, raw metals, and their processed products - following previous actions on steel, aluminum, automobiles, semiconductors, and pharmaceuticals.

China currently maintains a dominant position in the global extraction and processing of rare earth materials. Since July 2023, the Chinese government has implemented export licensing requirements for critical materials such as gallium, germanium, antimony, and graphite. Most recently, in April 2025, Beijing announced new export controls on seven medium and heavy rare earths, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, in response to the U.S.'s "reciprocal tariffs."

Notably, the White House statement referenced that, "due to retaliatory measures, Chinese goods currently face combined tariffs of up to 245% upon entering the U.S. market."

Just days earlier, The New York Times reported that the U.S. had imposed compounded tariffs on most Chinese imports, with total duties on some products reaching as high as 245%. Once again, the justification of "national security" is being used to erect trade barriers targeting core materials in high-tech supply chains.

According to the White House announcement, the Section 232 investigation will focus on the full value chain of critical minerals and their downstream products, including but not limited to:

1) Heavy rare earth elements

2) Strategic metals with dual-use potential (e.g., gallium, germanium, antimony)

3) Rare earth permanent magnets and advanced alloy components

The investigation, led by the U.S. Department of Commerce, will be conducted under Section 232 of the Trade Expansion Act of 1962. It will assess whether imports of these materials "threaten to impair national security." If the investigation finds a threat, the president will have the authority to impose tariffs or quotas. These new Section 232 tariffs are expected to replace existing "reciprocal tariffs" and introduce long-term, security-based trade barriers.

This investigation reflects the intensifying strategic competition between the U.S. and China in rare earths and high-tech materials.

Over the past months, Beijing has rolled out export controls on critical materials used in strategic industries including high-performance electronics, defense systems, aerospace, AI chips, and advanced optics. The White House statement accused China of "weaponizing" these resources through export restrictions, price manipulation, and overcapacity, framing them as systemic risks to U.S. national security.

The underlying goal of the new probe is to:

1) Weaken China's leverage in the global supply of key materials

2) Force reshoring of refining, processing, and manufacturing operations

3) Gain negotiation advantage in a broader geopolitical resource and trade battle

According to The New York Times, the U.S. has adopted a multi-layered tariff structure on Chinese goods, which includes:

1) WTO base tariffs (avg. 3.4%)

2) Trade war tariffs (7.5%–100%)

3) Sector-specific duties on steel, aluminum, and autos (25%)

4) 2025 "fentanyl tariffs" (20%)

5) "Reciprocal tariffs" (125%)

As a result, items like syringes, lithium batteries, wool sweaters, and toys face total tariff burdens of 145% to 245%.

On April 11, U.S. Customs announced a temporary exemption of "reciprocal tariffs" on electronics - including smartphones, laptops, and certain semiconductor devices. However, just two days later, President Trump stated on social media that the exemption was only temporary, and that electronics would be "reinstated in future investigations."

Since returning to the White House in January, Trump's tariff policy has grown increasingly aggressive and systematic. From steel and cars to electronics, pharmaceuticals, and now essential raw materials, the logic of decoupling has expanded from products to resources, and from end-use sectors to upstream supply chains.