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China Tightens Grip on Rare Earths; Tariffs Present Puzzle for Toymakers By Paul Berger

China is tightening its grip on the world's rare-earth industry. Beijing is asking Chinese rare-earth companies for lists of employees with technical expertise in an attempt to ensure they don't divulge trade secrets to foreigners. The WSJ's Jon Emont writes that the queries point to the growing geopolitical significance of China's control over the materials , which are widely used in cars, electronics and weapons and stand at the center of the U.S.-China trade war.

China's recent export restrictions on rare earths have reinvigorated efforts to develop rare-earth industries in countries such as the U.S. and France. One of the main hurdles is the shortage of rare-earth production expertise outside of China. China's Ministry of Commerce is asking companies for lists of personnel in crucial processing roles, and in some cases is asking workers to turn in their passports to prevent unauthorized trips abroad.

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Supply Chain Strategies

An Illinois toymaker's struggles to respond to whipsawing tariff policies illustrate the challenges of hastily redrawing global supply chains. Rick Woldenberg's workers have spent recent months halting shipments, rerouting cargo, raising prices and freezing expansion plans, the WSJ's Theo Francis writes. The most pressing questions are how to move toy production out of China .

Lining up new factories in another country is just the start. Heavy manufacturing-molds must be transported hundreds or thousands of miles by truck or ship and then reassembled. Quality-control processes and safety inspections must be re-created.

Then there's the risk of sudden policy swings. Woldenberg started relocating 1,500 injection molds installed in Chinese factories after Trump slapped 145% tariffs on China in April. But after Washington and Beijing in May reached a deal to reduce tariffs to 30% for 90 days, Woldenberg's team had to turn around a truck about to cross China's border with Vietnam weighed down by heavy steel molds at a cost to the company of $13,000. Equipment that had earlier crossed into Vietnam would now produce toys at a higher cost.

Because of the deteriorating U.S. relationship with China, Woldenberg is looking to increase production in Vietnam and in India. However, tariff rates on both countries could rise sharply in July.

FedEx expects a $170 million financial hit this quarter due to President Trump's trade war. (WSJ) Canadian officials are trying to convince President Trump that the U.S. benefits by keeping trade open with its northern neighbor. (WSJ) Quotable Number of the Day In Other News

Sales of new homes sank in May amid continued concerns over high mortgage costs. (WSJ)

President Trump is considering speeding up the timeline to announce a successor to Federal Reserve Chair Jerome Powell. (WSJ)

Shell is holding early-stage talks to acquire rival BP. (WSJ)

Motorhome maker Winnebago Industries reported a lower profit and revenue on soft retail demand . (WSJ)

Tesla's sales in the European Union logged another steep decline in May even as the bloc's EV market shows signs of growth. (WSJ)

Chinese electric-vehicle maker BYD is pulling back on production and expansion plans as sales slow. (Reuters)

Trump said he is negotiating with Finland to buy 15 icebreakers . (USA Today)

A Mexico City-based logistics company is launching a twice-monthly combined ocean-trucking service between Mexico's Gulf Coast and the U.S. East Coast. (Journal of Commerce)

A CMA CGM containership has become the first large vessel to pass through the Suez Canal in 15 months. (TradeWinds)

Four workers died and five were injured following a fire aboard a tanker docked in Indonesia. (Lloyd's List)

Walmart is testing small warehouses known as "dark stores" to speed up deliveries . (Bloomberg)

About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at [mark.long@wsj.com].

Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

June 26, 2025 07:03 ET (11:03 GMT)

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