Global Economic Controls Escalate, Mirroring Strategic Resource Denial

Economic tensions are intensifying globally as nations increasingly deploy "nuclear-level" financial sanctions and strategic export controls, drawing parallels between critical rare earth elements (REE) and advanced semiconductors. As one observer, Teortaxes▶️, noted on social media, > "except for vague «key mineral inputs», these are all nuclear-level financial sanctions or coercing third parties. REE export controls are analogous to semiconductor-related ones: something the respective side actually produces and can ≈painlessly deny." This perspective underscores a significant shift towards weaponizing economic dependencies.

China has recently expanded its stringent export controls on rare earth elements and related technologies, including permanent magnets essential for defense, electric vehicles, and high-tech industries. These measures, which took effect in October and December 2025, target elements like neodymium and dysprosium, critical for advanced manufacturing. This move leverages China's near-monopoly in REE processing, with the IEA reporting China refines 70% of important strategic minerals and controls 94% of permanent magnet production, creating significant vulnerabilities for global supply chains.

Concurrently, the United States has tightened its semiconductor export controls against China, aiming to curb its advancements in artificial intelligence and military capabilities. These restrictions, which have been progressively expanded since 2022, target advanced chips, manufacturing equipment, and related software. China has responded with its own investigations into U.S. chip companies and a push for domestic semiconductor self-sufficiency, creating a "tit-for-tat" escalation in the technology sector, as reported by MicrochipUSA.

Beyond material controls, severe financial sanctions, often described as "nuclear-level," are being increasingly utilized as a foreign policy tool. These include asset freezes, transaction prohibitions, and, crucially, secondary sanctions that coerce third-party entities into compliance by threatening their access to the U.S. financial system and the dollar. The Council on Foreign Relations highlights that the U.S. uses economic and financial sanctions more than any other country, leveraging its global financial system influence.

This strategic use of economic leverage forces countries and companies to align with foreign policy objectives, leading to de-dollarization efforts and a more fragmented global financial order. The combined effect of these escalating economic tools highlights a profound geopolitical realignment, where nations are leveraging their control over strategically produced goods and financial systems to exert influence, reshape global supply chains, and secure national interests.