Japan’s economy is facing a shortage of critical minerals, including rare earths, due to China’s export restrictions. The shortage is starting to affect the broader Japanese economy, adding a sense of urgency for Prime Minister Sanae Takaichi’s government to find alternatives to exports that China has cut off.

Rare Earths and the Japanese Economy

Rare earths are crucial in making items from electric cars to weapons, and China dominates the global market for these minerals. Since Takaichi enraged Beijing with comments about defending Taiwan in November, Beijing has choked off shipments of certain key minerals to Japan.

The Japanese government is racing to line up alternatives, including investments and subsidies to work with allies and companies to secure stable supplies of rare earths and other critical minerals. Takaichi signed a framework with U.S. President Donald Trump in October to coordinate on critical minerals and rare earths, including joint stockpiling and rapid-response supply arrangements.

Japanese companies are also feeling the impact of the shortage, with many citing export controls as a risk to their business. Watchmaker Citizen Watch said that restrictions on the export of rare earths could affect the company’s production activities and financial performance.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.