Trade Tension and Critical Materials

Welcome to the latest edition of our LinkedIn Newsletter.

In this edition, our experts examine five key trade barrier trends which are impacting critical material supply chains around the world.

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Economic nationalism - what we have seen and what could come

Economic nationalism has become a central theme in critical material markets as nations worldwide evaluate their supply chains and policies.

On one hand, non-tariff trade barriers such as export controls and subsidies are being implemented to protect and grow domestic capabilities.

On the other hand, bilateral agreements are being negotiated with all parties to hedge the outcome of the trade war between the USA and China.

Going forward, we expect the US to remain relentless in the development of its "domestic" critical materials industry.

Meanwhile, China will embark on its 15th five-year plan, starting in 2026, where we expect increased trade diversification.

Resource nationalism - from endowment to enterprise

Governments pursue resource nationalism for a variety of reasons.

Some seek to maximise revenue; others aim to stimulate industrial development or secure strategic control over critical materials.

Nationalism may also reflect populist or sovereigntist agendas, particularly where anti-foreign sentiment is politically useful, and increasingly, environmental and social concerns are also driving resource-related policy.

While often framed by foreign investors as a threat to commercial interests, resource nationalism reflects a state's sovereign right to regulate and benefit from its own resource endowment.

Conflicts - creating demand, impacting supply

Conflict plays a multifaceted role in shaping critical material markets.

On the demand side, geopolitical tension drives a surge in military spending, fuelling demand for high-performance materials used in defence technologies.

At the same time, conflict often disrupts supply chains for critical materials.

Even conflicts that don’t directly involve producing countries can impact global flows through sanctions, trade restrictions, and shifts in investor sentiment.

In turn, this fragmentation pushes companies and governments to reassess sourcing strategies - diversifying supply, building stockpiles, or reshoring parts of the supply chain.

The result is markets that become more volatile, politicised, and expensive, where materials security is as much about diplomacy and resilience as it is about economics.

Self-sanctioning - supply concentration and processing expertise

The concept of “self-sanctioning” in commodities refers to the voluntary exclusion of sourcing materials from certain countries by firms or consumers, even in the absence of formal legal restrictions.

The effects ripple through global supply chains, leading to the emergence of parallel or dual supply systems.

Over time, this fragmentation can reshape commodity markets, entrenching geopolitical divisions and eroding trust by market participants, adding friction into international trade practices.

Since Russia’s full-scale invasion of Ukraine in February 2022, many companies have engaged in self-sanctioning by voluntarily cutting ties with Russian firms.

In turn, Russian producers and traders have looked to China and India to form new partnerships, which is becoming more entrenched over time.

Trading blocks - a tungsten case study

Tungsten trade data is already demonstrating the impact that such policies can have on the flow of materials.

Not since the inter-war period of the 1920s has the world experienced policy-driven disruptions to trade flows as is currently playing out.

Tungsten trade data is already demonstrating the impact that such policies can have on the flow of materials.

In 2024, China more than doubled its tungsten concentrate imports and in 2025 to date represents nearly half of all global imports, a move widely seen as strategic.

Meanwhile, in the USA, the DoD (Department of Defence) has mandated that, by January 1st 2027, no tungsten (raw or processed) used in military applications can originate from China, Russia, or North Korea, three of the world’s top mine producers.

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If you'd like to speak to our global team of experts about our detailed market intelligence and bespoke consulting services across more than 30 critical material supply chains, from mine to market, please get in touch here.

Our experts will present more detail for our outlook for critical material supply chains at our London Critical Materials Forum on Tuesday 14 October, during LME Week, and held in association with the Minor Metals Trade Association.

Attendance is free but space is limited - register here to join us.