Global trade tensions are entering a new phase. Beijing’s restrictions on rare earth exports and Washington’s threat of tariffs up to 100% signal more than a short-term standoff – they point to a structural shift in supply chains that could reshape cost dynamics and compliance requirements for exporters.

For Swedish companies, the next 90 days will be critical as policy decisions in Washington and Beijing ripple through key sectors like automotive, electronics, and industrial manufacturing.

New controls raise US–China tensions

China’s new export limits on rare-earth minerals – gallium, germanium, and graphite – have reignited trade tensions with the US. These materials power semiconductors, EV batteries, and defence tech, giving Beijing leverage over high-tech supply chains. Washington has threatened tariffs of up to 100% unless restrictions ease.

Two phases of Chinese export controls:
  • 9 Oct 2025: Licences required for direct exports of certain rare earths and processing technology.
  • 1 Dec 2025: Controls expand to indirect exports – requiring licences for overseas-manufactured products that contain Chinese-origin rare-earth materials or rely on Chinese processing technology.

President Trump admits tariffs are “not sustainable” long-term but continues using them as leverage alongside stockpiles, price floors, and direct investment. The US has previously used similar export controls on US technology as sanctions against Iran and Russia. However, such measures have not been voiced in the current escalation. The next 90 days are critical: a tariff pause could end abruptly, signalling deeper supply chain realignment.

How Swedish exporters are affected

For Swedish companies, the implications differ depending on supply chain exposure:

  • Direct importers of Chinese rare earths: Face immediate regulatory hurdles, licencing requirements, and potential price spikes. Forward planning and securing licences are critical to avoid disruptions. 
  • Companies relying on tier-2 or tier-3 suppliers: May not import materials directly, but will experience trickle-down effects. Suppliers affected by Chinese controls could delay shipments or pass on higher costs, creating hidden risks that can disrupt production and trigger compliance obligations.

In the short term, higher US tariffs on Chinese-origin components may raise landed costs for goods sold into the US market, while stricter rules of origin and traceability requirements increase compliance burdens. Supply-chain uncertainty may be acute: limited availability until 2027 is forcing manufacturers to rethink sourcing strategies. Swedish firms integrated into the US value chain face rising material costs and growing scrutiny over supply-chain transparency.

These headwinds underscore how deeply the US–China rivalry shapes transatlantic trade flows, even for economies like Sweden that are not direct participants in the dispute.

Opportunities in disruption

Amid the disruption, strategic opportunities are emerging. US efforts to localise manufacturing and reduce dependence on China are opening new channels for trusted partners. Sweden’s strengths in clean energy, advanced automation, sustainable mining, and supply-chain transparency align closely with US industrial priorities.

Companies that can deliver verified sourcing, compliance assurance, or critical-material alternatives are well-positioned to benefit from this shift. Acting now – diversifying suppliers, reassessing exposure, and deepening US partnerships – enables Swedish exporters to move from reactive to strategic, turning disruption into a competitive advantage.

What to watch this week
  • G7 coordination: G7 finance ministers are weighing a joint response to China’s rare-earth export limits. 
  • Tariff relief precedent: AstraZeneca’s multi-year exemption – secured through US price concessions and a Virginia facility – sets a precedent for “production-for-access” deals, but the scope remains unclear. 
  • Pricing pressure: US buyers in machinery, vehicles, and electronics may push harder on price to offset tariffs, challenging Swedish exporters to protect margins. 
  • Truck order annexe: The annexe specifies which models and parts face tariffs or exemptions under Section 232, directly shaping cost, compliance, and sourcing decisions
Get in touch

Business Sweden has extensive experience in tariff scenario analyses, localisation strategies, and supplier evaluations.

To help Swedish SME companies navigate these shifts, Business Sweden has launched the US–Sweden Tariff Intelligence & Advisory platform. The initiative provides real-time tariff updates, practical implementation tools, and access to expert-led sessions and peer learning. It also connects you with vetted customs brokers and logistics partners to support compliance and supply-chain resilience.

If you need support in assessing your supply chain or are interested in joining the platform, please contact Johan Karlberg or Vlad Månsson

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