Japan is calling for a united response from G7 nations following China’s tightening of rare earths curbs. Finance Minister Katsunobu Kato voiced concern during recent international financial meetings in Washington, where he urged greater cooperation to counter the growing risks to critical supply chains. The appeal comes after China introduced new restrictions on the export of rare earth materials and associated technologies. These materials are crucial for sectors such as electric vehicles, defense, and semiconductors. Kato emphasized that the move could disrupt global manufacturing and technology production, making cooperation among major economies more urgent.
In bilateral talks with U.S. Treasury Secretary Scott Bessent, Kato stressed the need for Japan and its allies to resist dependency on a single supplier. He said Japan remains committed to working within the G7 framework to address the strategic impact of China’s actions. Bessent echoed the sentiment, emphasizing supply chain resilience and diversification. China currently dominates global rare earth refining and processing. Its latest measures target rare earth magnets and specialty metals used in high-tech industries. These changes include stricter licensing, export reviews, and tighter regulation of processing technologies.
Japan relies heavily on Chinese imports for rare earth inputs, especially for refining. While it has begun diversifying sources and investing in recycling, alternatives remain limited. Companies and policymakers fear that escalating restrictions could create bottlenecks in manufacturing, particularly in automotive and electronics sectors. In response, Japanese firms have accelerated efforts to secure alternative sources. Some are increasing stockpiles, while others are exploring new suppliers in Australia, Southeast Asia, and North America. The government is also investing in domestic development of rare earth projects, including seabed mining.
Kato’s push for G7 coordination signals a broader strategic shift. Rather than act unilaterally, Japan seeks collective diplomatic and economic pressure. Analysts say this approach may help avoid open confrontation while still countering China’s growing control over key materials. G7 leaders are expected to discuss rare earth policy at upcoming summits. Options could include joint procurement, shared reserves, or research partnerships. Japan is likely to propose mechanisms that ensure open access to critical inputs while promoting sustainable development.
The rare earths curbs have brought renewed focus to economic security. Japan’s leadership in this area reflects a wider trend among advanced economies to prioritize resilience over cost-efficiency. As competition for key materials intensifies, long-term strategies will become essential. Ultimately, Japan’s concern over rare earths curbs is not only about trade—it’s about protecting technological leadership and industrial stability. The coming months will reveal whether G7 unity can turn that concern into coordinated action.
