Stage Three Begins: The Rare Earth Kill Switch Tightens
MSIQ | Compression Brief – June 29, 2025
Three months ago, China cut off seven rare earths via export licensing.
Today, we enter Phase Three.
This stage isn’t about new laws. It’s about quiet precision.
India, one of the loudest U.S. partners, just found out the hard way:
China has halted specialty fertilizer exports to India
Rare earth magnets — released case-by-case to EU and U.S. — are still blocked for India
Customs delays are procedural, not policy — no documentation to retaliate against
This is what MSIQ warned about: soft retaliation with hard compression.
While Wall Street argues over chip bans and tariff tit-for-tats, China is doing something else:
Controlling the chokepoints silently — without headlines.
Why This Matters
Phase One (April 7):
Trump announces tariffs with theatrical bravado, mispricing U.S. leverage as intact.
Phase Two (Geneva + London):
Fog diplomacy — a fake “truce” with no enforcement, no terms, and no result.
Now Phase Three:
China is using precision throttles across sectors — from magnets to micronutrients to data center coolant — with full deniability.
Not one U.S. or Indian official can say they were “sanctioned.”
But industries are bleeding.
The narrative is still “strategic competition.”
The reality is supply chain captivity.
The rest of this post covers:
– Why Phase Three is directional, not just symbolic
– Who’s exposed next (India, Japan, Europe vs. China’s soft grip)
– How to position capital for second-order choke spillovers
– The verification layer (hard anchors behind the fog)
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If your capital or policy lens touches this chain, MSIQ will help you see before it’s priced.