On October 18, 2025, the Dutch government took a bold step by imposing an export ban on Nexperia, a chip factory under Chinese control, citing national security and concerns over technological sovereignty. The move, as reported by Dutch media, is rooted in the belief that any nation serious about protecting its strategic industries cannot allow opaque foreign control—especially where conflicts of interest might arise. Yet, this principled stand has set off a cascade of consequences across Europe, Asia, and the United States, exposing the intricate vulnerabilities of global supply chains and the urgent need for strategic autonomy.
Beijing’s response was swift and predictable. Within a day, China retaliated with its own export ban from the Nexperia factory in Guangdong, further escalating tensions. According to Dutch sources, the simultaneous suspension of Nexperia’s Chinese CEO by the Enterprise Chamber only reinforced China’s perception that the Netherlands was acting at Washington’s behest—a view that had already gained traction after earlier Dutch restrictions on ASML’s advanced chip-making machines, themselves imposed under U.S. pressure.
The immediate fallout? A further disruption of already fragile supply lines. While the Dutch government’s intent was to regain control over its strategic sectors, the short-term effect has been to heighten Europe’s vulnerability. As one Dutch analyst put it, "The measure was intended to gain control over our strategic sectors, but in the short term it actually increases the vulnerability of European electronics chains."
This episode is just the latest flashpoint in a broader struggle over rare earth metals and critical components—materials that underpin everything from smartphones and electric vehicles to advanced military hardware. China, which accounted for roughly 70% of the world’s rare-earth metal extraction in 2024 (according to The Motley Fool), has long dominated this market. Its willingness to wield export controls as a geopolitical weapon is not new. In 2010, China halted rare earth exports to Japan amid a territorial dispute, sending shockwaves through the Japanese semiconductor industry and causing rare earth prices to soar.
Now, as China expands its export controls to include alloys, oxides, and even recycling technologies tied to seven key rare earth elements, countries worldwide are scrambling to shore up their own supply chains. The Korea Institute for International Economic Policy recently highlighted that Korea’s dependence on Chinese imports for core minerals climbed from 17.3% in 2018 to 31.7% in 2023, before dropping to 24.2% in 2024. That’s still more than twice the dependency of the United States or the European Union.
Korea’s high-tech industries are especially exposed. As of last year, 85.3% of Korea’s lithium-ion battery imports came from China, along with over half of its processed metals for semiconductor manufacturing. The country is also heavily reliant on China for platinum group metals, titanium, fluorite, silicon, gallium, and germanium. The Korean government and industry experts warn that further Chinese export controls—potentially expanding to vanadium, fluorite, beryllium, aluminum, and magnesium—could deliver an even greater shock to Korea’s economy. Researcher Kim Joo-hye of the Korea Institute for International Economic Policy cautioned, "China's influence in Korea's import market is greater than that of China in the global market, so if China's mineral export control is implemented, Korea could be more shocked." She advised, "We need to make preemptive preparations between the Korean government and companies, such as adjusting stockpiles and diversifying import lines."
The United States, meanwhile, has been taking its own steps to reduce reliance on Chinese minerals. The U.S. Geological Survey reports that, as of last year, America relies 100% on imports for 15 non-fuel minerals—12 of which are deemed critical. However, the U.S. has managed to keep its dependence on Chinese imports of key minerals in the 4–5% range since 2021, thanks in part to efforts to diversify supply and boost domestic production. Imports from China have actually fallen by 2.8% annually since 2018, even as overall imports of critical minerals have grown.
One American company at the heart of this strategic shift is MP Materials, which operates the Mountain Pass mine in California—one of the only rare-earth metal mines and processing facilities in the United States. The company’s fortunes have soared in 2025 amid rising U.S.-China tensions. After China announced new restrictions on rare-earth metal exports to the U.S. in early October, MP Materials’ stock jumped 42% in just two weeks, and is up about 480% for the year, according to The Motley Fool.
MP Materials’ importance isn’t lost on Washington. Back in July, the U.S. Department of Defense invested $400 million in the company, becoming its largest shareholder. Just a week later, MP Materials inked a $500 million long-term supply agreement with Apple. These moves underscore how critical rare earths have become—not just for consumer gadgets, but for national security and economic independence. As The Motley Fool put it, "Few mining companies are as well-positioned to gain from geopolitical risks as this one."
Europe, too, is waking up to the risks of over-dependence. The European Union’s reliance on Chinese key mineral imports rose from 7.0% in 2021 to 9.9% in 2022, before dropping to 8.4% in 2023 as the bloc accelerated efforts to strengthen regional supply chains. The Netherlands, home to ASML—the world’s leading supplier of advanced chip-making equipment—finds itself in a particularly awkward spot. While ASML is a source of immense national pride and a linchpin of the global tech economy, the country’s reliance on Chinese raw materials and components remains a glaring vulnerability. As Dutch commentators have noted, "ASML embodies the pride of our technological strength, but the Nexperia affair shows how limited our autonomy is in practice."
This paradox is not lost on policymakers. The current crisis has injected new urgency into calls for greater European strategic autonomy. That means not only seeking alternative sources for rare earths and other critical materials, but also expanding domestic production of semiconductors and investing in secure energy supplies. The Dutch government, for its part, is emphasizing the need to give ASML room to grow in Eindhoven, viewing this as essential for future prosperity and for reducing dependence on foreign supply chains.
Yet, as the Nexperia saga demonstrates, courageous political choices often come with painful short-term costs. The uncomfortable truth, as Dutch analysts point out, is that Europe and the Netherlands have ignored their dependencies for too long. The choice now is stark: remain trapped in a cycle of vulnerability, or invest in the autonomy that will allow nations to stand by their principles without fear of reprisal.
As the world’s major economies race to secure their own supplies of rare earths and critical minerals, the stakes have never been higher. The scramble for autonomy is reshaping alliances, redrawing supply chains, and forcing governments—and companies—to rethink what it means to be truly secure in an era of resource weaponization.
