WSJ What’s News - China Restricts Critical Minerals to Western Defense Companies

Episode Date: August 4, 2025

A.M. Edition for Aug 4. China has gained leverage over the U.S. military supply chains by choking off the exports of critical minerals to Western defense companies. The WSJ’s Jon Emont explains how these restrictions from China will have significant consequences for the U.S. military. Plus, the Trump administration defends the president’s decision to fire the head of the Bureau of Labor Statistics, following Friday’s weaker-than-expected jobs numbers. And, dozens of Texas House Democrats flee the state in a bid to block Republican plans to redraw the state’s congressional map. Azhar Sukri hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is a true story. It happened right here in my town. One night, 17 kids woke up, got out of bed, walked into the dark, and they never came back. I'm the director of Barbarian. A lot of people died in a lot of weird ways. You're not gonna find it in the news because the police covered everything all up. On August 8th... This is where the story really starts. Weapons.

The Trump administration doubles down on its move to fire a top labor statistician, plus pressure mounts on Israel to end the war in Gaza after Hamas releases videos of emaciated hostages. Those videos basically create pressure on the government by whipping up a lot of anger and frustration within the Israeli population which they hope will press the Israeli government to give in to their demands. And China is squeezing the supplies of key minerals for the US defense industry. It's Monday, August 4th. I'm Azhar Sukri for The Wall Street Journal. Here is the AM edition of What's News, the top headlines and business stories moving

your world today. The Trump administration has defended the president's controversial move to fire the head of the Bureau of Labor Statistics following Friday's weaker-than-expected job number. Trump's chief economic adviser, Kevin Hassett, told NBC's Meet the Press that the dismissal is part of Trump's plan for further changes at the agency. The president wants his own people there so that when we see the numbers, they're more transparent and more reliable

and if there are big changes and big revisions we expect more big revisions for the jobs data in September for example that we want to know why we want people to explain it to us. Trump asserted without evidence that the government's job numbers have been manipulated for political purposes. Last week's data showed that hiring slowed dramatically in July, and that job seekers are out in the cold for longer. The number of people unemployed for at least 27 weeks topped 1.8 million, the highest level since 2017. Later this week, jobless claims will provide investors with further insights into US hiring.

In the meantime, markets will be on tenterhooks as President Trump moves to name a new head of the Bureau of Labor Statistics within days, as well as a replacement for Federal Reserve Governor Adriana Kugler, who said she would resign from her post this week. The vacant board seat opens a slot for Trump to nominate an eventual successor, to Fed Chair Jerome Powell to join the central bank. Dozens of Texas House Democrats fled the state late yesterday in order to block Republican plans to redraw the state's congressional map, a move that would give the GOP five new

seats. In response, Texas Governor Greg Abbott threatened to remove the Democrats from office or charge them with felonies. Republicans have called their plan fair game and necessary to hold their national majority. But Democrats, including Texas House Minority Leader Gene Wu, have argued that the unusual mid-decade redistricting amounts to cheating, heard here courtesy of ABC7 Chicago. Their attempts to disenfranchise Texans is being used, the tool they're using is a racist, gerrymandered map. A map that seeks to use racial lines to divide hardworking communities who have spent decades building

up their power and strengthening their voices. And Governor Abbott is doing this in submission to Donald Trump. Democrats expect to remain out of state for two and a half weeks until the end of the special session to prevent the House from meeting. In Israel, photos and videos of two emaciated Israeli hostages, Evyatar David and Ram Braslavsky, have led to fresh protests against Prime Minister Benjamin Netanyahu, with families and the international community once again calling for an end to the war. Our correspondent in Tel Aviv, Dov Lieber, has the details.

What we see are Evitar and Ram, who are completely emaciated, their bones are sticking out of their skin, essentially begging for their lives. And here Hamas kind of hits two birds with one stone. They remind the international community about the hunger crisis in Gaza, and at the same time they put pressure on Israelis to agree to end the war on Hamas's terms in order to save the lives of these hostages. And those videos basically create pressure on the government by whipping up a lot of anger and frustration within the Israeli population which they hope will press the Israeli

government to give into their demands. So this has been a constant strategy used by Hamas throughout the war. The release of the videos comes as talks for a temporary ceasefire broke down last week, instead the US and Israel are now working on one comprehensive deal. For the entirety of the war, all these negotiations were for a two-phase deal, one phase to get a temporary ceasefire in which some of the hostages are released in exchange for Israel redeploying outside of Gaza and the release of thousands of Palestinian prisoners in Israeli jails. But each time those two phase deals were agreed to, it never went to phase two, which was, of course, a permanent end to the war. And that's because neither Israel nor Hamas are ready to

agree to each other's terms to end the war. So currently Israel and the United States are trying to figure out what are the parameters for their comprehensive deal that they are going to send to Hamas. We know Israel is demanding Hamas completely disarm and demilitarize the Gaza Strip and Hamas has already said that they will refuse to do that and it's not clear how they can bridge that gap. Now always behind the scenes things look slightly different so there is a path although it is extremely challenging path. And right now talks as they have been conducted are essentially over. That was Journal Middle East correspondent Dov Lieber.

Turning to Ukraine now and across occupied territory in the country, Russian backed authorities have seized thousands of apartments after declaring them ownerless. The move means many Ukrainians who fled their homes are now faced with growing barriers to return and prove their ownership or claim compensation, essentially replacing people who once lived in conquered territories with ethnic Russians. As part of Moscow's strategy, properties are being sold to Russian newcomers who receive a range of perks, such as 2% mortgage rates on new building developments. Coming up, China chokes the supply chain of critical minerals for Western defence makers, leading to price hikes and delays. That story after the break. Hungry now?

Now? What about now? Whenever it hits you, wherever you are, grab an O. Henry bar to satisfy your hunger. With its delicious combination of big crunchy salty peanuts covered in creamy caramel and chewy fudge with a chocolatey coating, swing by a gas station and get an O'Henry today. We are exclusively reporting that China is limiting the flow of critical minerals to Western defense manufacturers that's delaying production and forcing companies to scour the world for stockpiles of the minerals needed to make everything from bullets to jet fighters.

Journal Senior reporter Jonathan Emond has been following the story. John, what have the consequences of Beijing's delays been for US military manufacturers? It's a really tricky time for them. They rely on lots of these niche minerals, some of which are essentially almost only produced in China or the vast majority of them are produced in China. So it's really difficult to source some of these fairly obscure minerals and elements, things like germanium and gallium and samarium. So we saw last year, December, China banned the export of a couple of, again, niche minerals

that are needed for certain military functions. And then in April this year, they heavily restricted the export of rare earth magnets, which are used in a lot of military functions, things like fighter jets and submarines and missiles. It's just become much more difficult to source these things. As it's become much more difficult to source these things, the companies that do have stockpiles, the traders that do have existing stockpiles, they're of course getting mobbed by offers and what that inevitably does is it pushes up prices. And you know, for companies like Lockheed Martin, different military systems that they have are going

to require a lot of different minerals like this is starting to bite. And in what ways is this latest restriction of critical minerals to the West different from what China has done before? So what we're seeing is that, let's say the April rare earth magnet and rare earth mineral restrictions that were introduced, trade negotiations since then have gotten no substantial ease. So the United States and China trade negotiators have met repeatedly. And what's happened now is that companies like Ford have reported that they've been able to access more magnets than they were before. So there's been some progress for civilian companies on the magnet front. But when I've been speaking to folks who are sourcing rare earth minerals and magnets that have military applications, they haven't seen that easing. And it's not surprising because China specifically said

when it introduced these restrictions that the intention was for national security purposes. And John, what is Beijing actually trying to achieve by doing all of this? They're clearly trying to make sure that they're near monopoly on certain types of minerals means that they're not producing minerals that are going to be used in defense equipment that could be one day used against China. It's sort of similar to actions the United States has taken over the years to make sure that certain types of sophisticated electronics and other things made in the US doesn't make its way to Chinese military-linked companies. What we found is that it's been somewhat effective because it means that these companies have

to spend a lot more time thinking about where they're going to get their materials. In some cases, it's even caused production delays. In other cases, it's just raised the price pretty substantially of materials. And what that means is the United States is only going to be dedicating a certain amount of money to its military, right? So when you see pretty significant cost inflation, because say you have to find some mine or processing facility elsewhere that can maybe do things at small quantities or try to get some laboratory scale processing facility in the United States up really quickly. In the meantime, things are

going to cost a lot more. All that does is it just makes it more difficult and more expensive to make military equipment in the US. Journal Senior Reporter John Eamon, thank you so much. Thank you so much. And that's it for what's news for this Monday morning. Today's show was produced by Kate Bulevend and Daniel Bach. Our supervising producer is Sandra Kilhoff. I'm Azhar Sukri for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.