China threatens to withhold indispensable tech materials ahead of Trump-Xi summit.

Ahead of a potential meeting between President Trump and Chinese leader Xi Jinping, Beijing dropped a bombshell: China was further restricting access to the supplies that American companies need for computer chips, cars and other technology. The move gives China leverage ahead of expected trade talks with Washington.

Here's what to know.

Which supplies did China restrict and why are they important?

They are called rare earths, which are elements in the ground. While not actually rare, they are difficult to extract because they are scattered and mixed among other rocks and minerals. Few places have a rich concentration of the most sought-after rare earths. One such area is southern China, part of the reason the country supplies around 90% of the world's rare earths.

One of the most critical rare earths is dysprosium, atomic number 66 on the periodic table. If the tech industry were a bakery, dysprosium would be like baking powder: It is used in small quantities but essential for enabling electric-car motors, wind turbines, military systems and computer-chip machinery.

What exactly has China done?

China's Commerce Ministry on Thursday expanded previous export controls by adding a seemingly onerous requirement: Any company -- in China or abroad -- must get Chinese permission to export certain products that derive more than 0.1% of their value from a rare earth.

The ministry also expanded the list of export-restricted rare earths, and banned their export for use by foreign militaries. Meanwhile, China on Friday targeted other American interests by imposing port fees on U.S. ships and opening an antitrust investigation into Qualcomm. It is all part of Beijing's campaign to fight back against Washington's own trade curbs.

Which businesses will be affected?

That depends on which products are affected, and the rules aren't clear. They might target just rare-earth materials and rare-earth magnets, or they might hit a range of parts and components that have some rare earths inside. The ambiguity may be purposeful to give the Chinese side flexibility during negotiations with the U.S.

Most finished consumer goods, such as laptops and smartphones, will likely fall short of the threshold, said research firm Capital Economics, but intermediate goods such as motors may exceed it.

China said it would give particular scrutiny to export of the restricted items if they are intended to help build advanced chips or support artificial-intelligence research. Earlier rare-earth restrictions already hit automakers such as Ford, and the targeting of AI and semiconductors was a reminder that China is trying to curb American AI chip leader Nvidia.

Some analysts say the new rules suggest that companies with both military and civilian businesses, such as Boeing, could be denied access to rare earths for even civilian purposes.

Will China go through with it -- and what can the U.S. do?

Many analysts believe the new restrictions are a negotiating tactic by Beijing ahead of trade talks, but it is likely to retain some rare-earth curbs for the long term. In response, Trump said he would impose 100% tariffs on China by Nov. 1 and suggested he may snub Xi at a conference in South Korea late this month, when they are supposed to meet. The U.S. also has leverage over China because it produces chips needed for artificial-intelligence processing and industrial products like jet engines -- things Beijing has yet to master.

The U.S. is building its own rare-earth magnet supply chain. Trump suggested the U.S. may stop importing Chinese rare earths. Rare-earth deposits are available outside China, but matching China's mining and processing infrastructure will take years.