Xi pressures Takaichi by throttling key China mineral exports to Japan

China has implemented significant curbs on key mineral exports to Japan, a move seen as pressure on Prime Minister Sanae Takaichi following her remarks on Taiwan in November 2025. Shipments of certain tungsten forms have reportedly ceased, and magnet flows in May 2026 reached their lowest point since the initial export controls were imposed globally.

These restrictions appear designed to inflict targeted economic pain on Japan without provoking a broader escalation that could draw in the United States. While not as severe as past trade disputes, the current measures are forcing Japanese companies to deplete stockpiles and urgently search for alternative suppliers. Masayoshi Matsumoto, CEO of Sumitomo Electric Industries Ltd., a major tungsten buyer, expressed concern over potential disruptions to Japanese manufacturing if the situation persists, emphasizing the need for dialogue with the Chinese government.

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If this situation continues, of course, we need to have talks with the Chinese government. If we’re shut out by China, it’s definitely going to cause problems for Japanese manufacturing.

Despite the growing economic pressure, Prime Minister Takaichi has reportedly avoided seeking a direct meeting with President Xi Jinping at the upcoming APEC summit in Shenzhen due to perceived personal attacks from China. Diplomatic engagement between the two Asian economic powerhouses has been minimal in 2026, with Japan's ambassador to China struggling to secure meetings with Chinese foreign ministry officials. Japan's public stance remains open to dialogue, but it is also pursuing strategies to reduce reliance on single sources for critical minerals, aiming for no single country to account for more than 60% of rare earth supplies by 2030, according to Finance Minister Satsuki Katayama.

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Japan remains open to dialogue with China, adding that such talks were taking place at “various levels”.