Tokyo: Export controls have become a pivotal tool in global trade conflicts, as nations aim to prioritize domestic industries and gain political leverage by restricting the movement of critical technologies, materials, and services. Countries are increasingly tightening controls on exports of sensitive goods, including semiconductors, artificial intelligence components, quantum computing systems, and military-grade materials. These measures, traditionally seen as national security actions, are now strategic weapons in ongoing tech and trade wars.

According to Anadolu Agency, Emily Benson, head of strategy at US-based Minerva Technology Futures, emphasized that export controls have been utilized to impair strategic competitors' military modernization capabilities. She highlighted the novel trend of tying export controls directly to trade negotiations. A recent example involved the United States imposing reciprocal tariffs on China, prompting Beijing to halt exports of rare earths, which led to significant supply shortages in Europe's auto industry, affecting companies like BMW and Mercedes-Benz.

China's dominance in rare earth production remains a strategic advantage, with control over 70% of global production and 90% of refining capacity. This dominance is crucial as demand for rare earth elements is projected to rise significantly by 2040, driven by advancements in digital technologies, AI, and green energy transitions. A temporary agreement between the US and China provided some relief but did not address long-term access issues.

Japan has been proactively reducing its reliance on Chinese rare earths since a 2010 export suspension by China. The Japan Organization for Metals and Energy Security (Jogmec) has invested over $600 million in more than 100 overseas projects, including a partnership with Australian firm Lynas Rare Earths, creating a significant non-Chinese rare earth producer. Japan's strategy also includes urban mining, establishing reserves, and investing in innovative technologies like neodymium magnets for hybrid vehicles and perovskite solar cells.

Export controls are significantly altering global business strategies, with companies adapting to this evolving landscape. Benson noted that some companies, like Nvidia, view relaxed export rules to China as a potential strategic advantage, while others adopt a cautious approach amid the evolving US-China trade relationship. Current policies allow sophisticated exports if they are not for military use, but this could change as more countries develop dual-use AI technologies.

Mehmet Alpertunga Avci, a visiting scholar at the Vienna University of Economics and Business, suggested that countries with rare earth processing capacities have growing advantages over those relying on protectionist measures. He advised technologically underdeveloped nations to explore strategies like minimizing rare earth usage, entering trade-facilitating agreements, and creating industrial clusters based on tech transfer. Avci warned that rare earth-rich and tech-dominant countries may seek to expand control through production limitations, export certifications, and integrated supply chains, potentially escalating global competition over rare earths and intensifying national policies in the pursuit of technological and economic dominance.