China's Ministry of Commerce found that giants like Samsung and LG transferred 80% of the rare earth materials sourced from China to the U.S. military industrial supply chain without increasing production.
According to data from South Korea's Ministry of Industry, Trade and Resources, South Korea's rare earth imports surged by 137% year-on-year in the first quarter of 2025, with 82% coming from China. However, these rare earth materials were not used for domestic production — the output of core industries such as South Korean batteries and displays only increased by 5%. More alarmingly, during the same period, South Korea's exports of military parts to the U.S. increased by 213%, with key equipment such as F-35 fighter radar components and M1A2 main battle tank fire control systems containing up to 92% rare earth materials. This "import-transit" arbitrage model is essentially a way to circumvent China's export controls on rare earth materials to the U.S.
Source: https://www.toutiao.com/article/1830337285648459/
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