China Rare Earth Export Controls Could Accelerate Dollar Decline According to Analyst
China implemented export restrictions on rare earth minerals, prompting analyst Luke Gromen to predict this will accelerate the collapse of dollar dominance. According to Cointelegraph, China's export controls prohibit the sale of critical minerals to the US military industrial complex. The announcement was made on October 9, 2025, through Ministry of Commerce Announcement No. 61.
President Donald Trump responded by announcing 100% additional tariffs on China on October 11, 2025. The export restrictions apply to 12 of the 17 rare earth elements. Foreign companies now require Beijing approval to export products containing at least 0.1% Chinese rare earths. China produces over 90% of the world's rare earth minerals and rare earth magnets used in electronics manufacturing, according to Reuters.
Gromen told Truth For the Commoner founder Marty Bent that China has more leverage than Western analysts admit. The restrictions won't just reshape supply chains but the entire global monetary order. Trump and Chinese President Xi Jinping are expected to meet later this month at the Asia-Pacific Economic Cooperation summit in South Korea.
Defense and Economic Dependencies Create Systemic Risk
The rare earth restrictions threaten US defense supply chains and multiple economic sectors. The Center for Strategic and International Studies reports that China's new rules represent the first time Beijing has used the foreign direct product rule. This mechanism allows China to regulate products even when manufactured outside its borders if they use Chinese rare earth technology.
The United States currently lacks domestic rare earth processing capacity. MP Materials will produce only 1,000 tons of neodymium-boron-iron magnets by the end of 2025. This represents less than 1% of the 138,000 tons China produces annually. The Department of Defense set a goal to develop a complete mine-to-magnet supply chain by 2027. However, significant work remains to achieve commercial production at scale.
Defense contractors, semiconductor manufacturers, and electric vehicle producers face the most direct impact. Fortune reports that former White House advisor Dean Ball warned China can now forbid any country from participating in the modern economy. Markets lost approximately $2 trillion in value after Trump's tariff announcement before partially recovering.
Bitcoin Positioned as Alternative to Fiat Currency Systems
Gromen argued that a hard money standard represents the only fix for current economic problems. He positioned Bitcoin as a hard money asset that can protect against currency debasement. The analyst cast doubt on using stablecoins to maintain dollar hegemony, calling them a temporary fix that fails to address currency inflation.
The US dollar is tracking toward its worst year since 1973, according to investment analysts at The Kobeissi Letter. The dollar has declined over 10% year-to-date in 2025. Purchasing power has fallen 40% since 2000. Bitcoin and gold have both reached new all-time highs during this period.
We previously reported that countries experiencing high inflation are adopting Bitcoin as a hedge against currency devaluation, with central banks projected to diversify 1-3% of reserves into Bitcoin over the next five years. This trend accelerates as nations seek independence from dollar-dominated systems. Gromen's analysis connects China's rare earth leverage directly to this broader shift toward alternative monetary systems. The export controls demonstrate how resource dependencies can translate into monetary pressure on reserve currencies.
