Business
China has found Trump’s pain point – rare earths
Osmond ChiaBusiness reporter
ReutersLast week, China’s Ministry of Commerce published a document that went by the name of “announcement No. 62 of 2025”.
But this wasn’t just any bureaucratic missive. It has rocked the fragile tariffs truce with the US.
The announcement detailed sweeping new curbs on its rare earth exports, in a move that tightens Beijing’s grip on the global supply of the critical minerals – and reminded Donald Trump just how much leverage China holds in the trade war.
China has a near-monopoly in the processing of rare earths – crucial for the production of everything from smartphones to fighter jets.
Under the new rules, foreign companies now need the Chinese government’s approval to export products that contain even a tiny amount of rare earths and must declare their intended use.
In response, US President Donald Trump threatened to impose an additional 100% tariff on Chinese goods and put export controls on key software.
“This is China versus the world. They have pointed a bazooka at the supply chains and the industrial base of the entire free world, and we’re not going to have it,” said US Treasury Secretary Scott Bessent.
On Thursday, China said the US had “deliberately provoked unnecessary misunderstanding and panic” over the rare earths restrictions.
“Provided the export licence applications are compliant and intended for civilian use, they will be approved,” a commerce ministry spokesperson added.
This week, the world’s two biggest economies also imposed new port fees on each other’s ships.
The flare-up in the trade war brings to an end months of relative calm after top US and Chinese officials brokered a truce in May.
Later this month, Trump and China’s President Xi Jinping are expected to meet and experts have told the BBC the rare earths restrictions will give China the upper hand.
China’s new controls are bound to “shock the system” as they target vulnerabilities in American supply chains, said international business lecturer Naoise McDonagh from Australia’s Edith Cowan University.
“The timing has really upset the kind of timeline for negotiations that the Americans wanted,” he added.
Getty ImagesRare earth minerals are essential for the production of a whole range of technology such as solar panels, electric cars and military equipment.
For example, a single F-35 fighter jet is estimated to need more than 400kg (881.8lb) of rare earths for its stealth coatings, motors, radars and other components.
China’s rare earth exports also account for around 70% of the world’s supply of metals used for magnets in electric vehicle motors, said Natasha Jha Bhaskar from advisory firm the Newland Global Group.
Beijing has worked hard to gain its dominance of the global rare earth processing capacity, said critical minerals researcher Marina Zhang from the University of Technology Sydney.
The country has nurtured a vast talent pool in the field, while its research and development network is years ahead of its competitors, she added.
While the US and other countries are investing heavily to develop alternatives to China for supplies of rare earths, they are still some way from achieving that goal.
With its own large deposits of rare earths, Australia has been tipped as a potential challenger to China. But its production infrastructure is still underdeveloped, making processing relatively expensive, Ms Zhang said.
“Even if the US and all its allies make processing rare earths a national project, I would say that it will take at least five years to catch up with China.”
The new restrictions expand measures Beijing announced in April that caused a global supply crunch, before a series of deals with Europe and the US eased the shortages.
The latest official figures from China show that exports of the critical minerals were down in September by more than 30% compared to a year ago.
But analysts say China’s economy is unlikely to be hurt by the drop in exports.
Rare earths make up a very small part of China’s $18.7tn a year economy, said Prof Sophia Kalantzakos from New York University.
Some estimates put the value of the exports at less than 0.1% of China’s annual gross domestic product (GDP).
While rare earths’ economic value to China may be tiny their strategic value “is huge”, she said, as they give Beijing more leverage in talks with the US.
Despite accusing China of “betrayal”, Bessent has left the door open to negotiations.
“I believe China is open to discussion and I am optimistic this can be de-escalated,” he said.
During a meeting with the US private equity group Blackstone’s chief executive Stephen Schwarzman on Thursday, China’s Foreign Minister Wang Yi also highlighted the need for talks.
“The two sides should engage in effective communication, properly resolve differences and promote stable, healthy and sustainable development of China-US relations,” Wang said, according to the ministry’s website.
What China has done recently is “getting its ducks in a row” ahead of those trade talks with the US, said Prof Kalantzakos.
In curbing rare earth exports, Beijing has found its “best immediate lever” to pressure Washington for a favourable deal, Ms Bhaskar said.
Getty ImagesJiao Yang from Singapore Management University believes that although Beijing holds the cards in the short-run, Washington does have some strategic options at its disposal.
The US could offer to lower tariffs, which is likely to be attractive to Beijing as the trade war has hit its manufacturers hard, said Prof Jiao said.
China’s economy is reliant on the income from the goods it makes and exports. The latest official figures show its exports to the US were down by 27% compared to a year ago.
Washington can also threaten to hit China with more trade restrictions to hamper efforts to develop its technology sector, said Prof McDonagh.
For example, the White House has already targeted China’s need for high-end semiconductors by blocking its purchases of Nvidia’s most advanced chips.
But experts say that is likely to have only limited effects.
Measures targeting Beijing’s tech industry may slow China but won’t “stop it dead in the water,” said Prof McDonagh.
China has shown with its recent economic strategy that it is willing to take some pain to achieve its long-term goals, he added.
“China can carry on even if it costs a lot more under US export controls.
“But if China cuts off these rare earth supplies, that can actually stop everyone’s industry. That’s the big difference.”
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Trump administration in advanced talks for a rescue package for Spirit Airlines, source says
A Spirit commercial airliner prepares to land at San Diego International Airport in San Diego, California, U.S., January 18, 2024.
Mike Blake | Reuters
The Trump administration is in advanced talks for a financing package for Spirit Airlines as the carrier is facing the risk of a liquidation, according to a person familiar with the matter.
Spirit had been facing a potentially imminent liquidation, people familiar with the matter told CNBC last week, speaking on the condition of anonymity to discuss matters that had not yet been made public. The Dania Beach, Florida-based carrier in August filed for its second Chapter 11 bankruptcy in less than a year, after it struggled to increase revenue to cover rising costs.
President Donald Trump hinted at potential government aid on Tuesday, telling CNBC’s “Squawk Box“, “Spirit’s in trouble, and I’d love somebody to buy Spirit. It’s 14,000 jobs, and maybe the federal government should help that one out.”
The White House didn’t immediately comment.
“We are hopeful that the government will recognize the needs for emergency funds especially in the current economic environment,” a spokesperson for the Associated of Flight Attendants-CWA, which represents Spirit’s cabin crews, said in a statement. “The last thing our economy needs is tens of thousands more people out of work and the last thing the travelling public needs is fewer choices in air travel.”
The terms of the financing deal weren’t immediately known. The Wall Street Journal earlier reported that the talks were in an advanced stage.
The U.S. airline industry accepted more than $50 billion in taxpayer aid to weather the Covid-19 pandemic, which is still its biggest-ever crisis, but those funds weren’t handed to one specific airline. Some of the aid gave the U.S. government stock warrants for airlines.
Airlines also received a government bailout following the Sept. 11, 2001, terrorist attacks, but that money was also for more than one company. The U.S. in 2008-2009 also bailed out the auto industry during the financial crisis and took stakes in manufacturers.
The Trump administration has taken equity stakes in some companies it deemed critical to national security like Intel and USA RareEarth, though Spirit stands out as it is in bankruptcy.
In February, Spirit said it expected to exit bankruptcy in late spring or early summer, telling a U.S. court that it would shrink and focus its planes on high-demand routes and travel periods. Pilot and flight attendant unions had also made concessions, including going on furlough in recent months, in a bid to help Spirit survive.
But jet fuel prices have nearly doubled in some parts of the U.S. since then, further adding to challenges for Spirit and the rest of the airline industry.
As a low-fare airline that also faces competition from larger carriers with their own no-frills, basic economy offerings, it has grown harder for Spirit to cover expenses. Spirit had introduced extra-legroom seats and other premium options to try to cater to higher-spending customers.
Business
Iran war: Trump sanctions waiver or not – why India continues to buy Russian oil – The Times of India
In early March, India was staring at a possible crude oil supply problem – the US-Iran war caused the Strait of Hormuz through which 20% of global crude transits to be effectively closed. To rescue came Russian crude oil! In fact, Russian crude has become a crucial support for India’s oil imports both in April and March. The import volumes are actually touching highs seen when India was bagging Russian crude at a huge discount.US President Donald Trump sanctioned two Russian oil majors towards the end of last year. This made it financially unviable for Indian refiners to continue to buy Russian crude at the same level as before, though flows of unsanctioned oil continued.However, in March, with the US sanctions waiver in effect, India has aggressively procured Russian crude, picking up millions of barrels. After the Russia-Ukraine war, Russian crude has maintained its position as the largest supplier of crude oil to India. Through Western sanctions, US President Donald Trump’s pressure and sanctions on Russian oil majors, crude from Russia has continued to flow to India, though the levels have varied.
However, experts believe that once the situation in the Middle East normalizes, India will go back to buying crude from Gulf countries, and Russia’s percentage in India’s oil imports will come down.
US sanctions waiver & India’s aggressive buying
India has never officially said that it will stop buying Russian crude, and even when levels dropped after sanctions, Russia was still the biggest contributor. However, the Donald Trump administration’s decision to waive sanctions on Russian crude, and extend that waiver to May has allowed Indian refiners to step up procurement without any worries.According to the latest report from Centre for Research on Energy and Clean Air (CREA)’s analysis, while India’s total crude imports recorded a 4% reduction in March, Russian imports doubled.
“The biggest shift was in state-owned refineries’ imports from Russia, which saw a massive 148% month-on-month increase. Their imports were in fact 72% higher than March 2025, presumably due to Russian barrels being more available in the spot market, which serves as the primary source of imports for them,” says CREA.Russia’s share of India’s crude oil imports in March 2026 placed the month at the upper end of historical highs, closely mirroring peak levels seen in 2023, when Western sanctions redirected Russian oil flows toward Asia and made Moscow India’s single largest supplier.Sourav Mitra, Partner – Oil and Gas, Grant Thornton Bharat explains the emergence of Russia as a dominant supplier of crude for India.Russia’s share surged sharply in the months following the Ukraine war, peaking during several months in mid‑2023, particularly around May–June, when imports rose to about 1.9-2.0 million barrels per day and accounted for nearly 42-45% of India’s crude basket, displacing Iraq and Saudi Arabia. That dominance persisted through much of 2023, with average shares close to 40% between April and September, before easing in 2024 and early 2025 as price discounts narrowed, compliance costs increased and refiners partially rebalanced toward Middle Eastern grades.“Against this backdrop, the rebound seen in March 2026 effectively matches the 2023 peak, although the underlying drivers differed, with the latest spike largely reflecting supply disruptions in West Asia that curtailed Gulf inflows and compelled refiners to rely more heavily on available Russian cargoes. We expect that while March marks a return to near‑record dependence on Russian crude, such elevated levels are unlikely to persist once Middle Eastern supply chains stabilize,” Mitra tells TOI.
No more discounts! India paying a premium for Russian crude
What stands out is the fact that when India stepped up its procurement of Russian crude after the Ukraine war began, the oil was available at very steep discounts. This was due to European sanctions that made Russian crude available at a much lower rate than Brent. Come 2026, with oil supplies via Hormuz disrupted and global crude oil prices rising, Russia is now selling at a premium!According to Sourav Mitra of Grant Thornton Bharat, Indian refiners are currently paying a premium of about $4-6 per barrel over the Brent benchmark for Russian crude. These are some of the highest delivered premiums on Russian crude since Russia began diverting large volumes of crude to Asia after the Ukraine war, he tells TOI. “This shift is attributed to intense competition for prompt Russian cargoes as disruptions to Middle Eastern supply routes pushed refiners to prioritise assured deliveries over price. The premium contrasts starkly with February 2026, when Indian buyers were still securing Russian crude at discounts of roughly $12–$15 per barrel, shortly before conditions deteriorated in the Strait of Hormuz,” he elaborates.In fact, the turnaround is even more pronounced compared with 2022-23, when Russian crude frequently traded $20-$30 below Brent. The price inversion was reinforced by the US sanctions waiver issued in early March 2026 and effectively released millions of barrels into the market, strengthening sellers’ leverage. “As a result, India has shifted from discount‑driven buying to security‑led procurement, paying a premium to ensure supply continuity while Gulf flows remain disrupted,” he adds.
Why India continues to buy Russian crude
Russian oil is not going out of India’s crude imports anytime soon, experts say.However, Ivan Mathews, Head of APAC Analysis at Vortexa expects Russian crude imports to decline month-on-month in April. “Discounts on Russian crude were less competitive due to increased demand during the sanctions waiver period, which has since been extended to 16 May. This will lead to lower marginal imports for economics-driven refineries in India. Additionally, reduced crude loadings from Russia will decrease the availability of Russian barrels for imports in the coming weeks,” Mathews tells TOI.
Mitra of Grant Thornton Bharat says that Russian crude is now well integrated into India’s refining system and serves as a reliable fallback when alternative supplies tighten. Russia is likely to remain an important supplier through 2026 even as its share moderates from March’s highs and Middle Eastern flows stabilize.Sumit Ritolia, Manager Modelling and Refining at Kpler believes that Russian oil will continue to be a major part of India’s crude oil imports in the coming months as well. Currently, India’s Russian crude imports are tracking at around 1.6mbd, which is approximately 375 kbd lower than March levels.However, as Ritolia points out, this dip needs context as Nayara (≈400 kbd, fully reliant on Russian crude) has been under maintenance since the second week of April. Adjusting for this, the underlying demand signal for Russian barrels remains intact.“The flows are expected to range between 1.5-2 mbd with a slight dip possible due to ongoing infrastructure issues in Russia due to the conflict with Ukraine,” Ritolia tells TOI.Interestingly, Kpler data shows that even after US sanctions on Russian majors Lukoil and Rosneft came into effect late last year, Russia continued to be the largest supplier of crude oil to India. However, admittedly the volumes saw a sharp drop, with February levels being much lower. While the Donald Trump administration claimed finalising a trade deal contingent on India stopping crude imports from Russia, New Delhi has never said it will not buy oil from Moscow.The US first waived the sanctions in early March and then extended the waiver recently. Experts are of the view that even when the sanctions waiver lapses, Russian oil will continue to be imported, though the quantities may dip.“A key point that is often missed is that Russian oil itself is not sanctioned but certain entities, vessels, and financial channels are,” says Sumit Ritolia.According to Ritolia, Russia continues to be a core supplier for India, but in the absence of sanctions waiver procurement must strictly ensure:• No involvement of sanctioned sellers or intermediaries• Use of non-sanctioned vessels• Fully compliant financial, insurance, and trading channelsIndia is unlikely to move away from Russian crude in the near term. Instead, we should expect more documentation, tighter screening rather than a structural shift in sourcing as and when sanctions lapse, Ritolia added.
India’s Diversified Crude Supplies
But even as Russia is expected to continue being an important player in India’s crude imports, it is equally important to note that New Delhi has diversified its basket to include over 40 countries.As Sushil Mishra, Director, Crisil Intelligence points out: Historically, Russia’s share in India’s crude imports peaked at over 40%, however, it has varied in the last few years amid diversification efforts and evolving geopolitical dynamics. Improved refinery flexibilities have enabled Indian refiners to process a wider range of crude grades including those from the American, Russian, and Middle Eastern.“India continues to strengthen its energy resilience by diversifying crude sourcing and maintaining a pragmatic sourcing strategy driven by price, availability, and energy security considerations. This approach allows flexibility to adjust sourcing patterns in response to changing global market conditions and geopolitical developments,” he tells TOI.
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