US President Donald Trump and China continue to exchange economic blows. China’s latest restrictions have put something of a damper on Tesla’s global operations. But it’s not just the brand’s vehicles feeling the pain of trade restrictions. Even the upcoming Tesla Optimus robots are in the crosshairs of the ongoing trade war. 

China’s latest rare earth trade restrictions are putting the squeeze on the Tesla Optimus robots

Tesla CEO Elon Musk unveiled the brand’s Optimus robots last year to a crowd of quizzical faces. Here you have an electric car marque with a lengthy tenure of building the most disruptive EVs on the market. But the brand’s oddball boss has a crew of dancing humanoid Tesla robots mixing drinks and mingling with people. Still, Musk wanted to start production of the “Optimus” robot this year. But that might not be in the cards.

China launched rare earth material export restrictions in response to skyrocketing Trump tariffs. As a result, seven of the rare earth magnets and materials that Tesla needs to spin up production of the Optimus robots are currently out of reach. The bottom line? Tesla may not be able to keep up with its timeline for its first 5,000 humanoid machines, although Musk is confident that Tesla can still produce thousands of robots in 2025. 

But Musk is working to secure a workaround free of the president’s tariffs and escalating trade dispute. Beijing is willing to entertain Musk’s requests for continued access to the materials, per CNBC. However, the People’s Republic wants reassurance from Musk that the materials won’t be used for military purposes, like drones or the spectacularly spendy F-35 fighter program.

“China wants some assurances that these aren’t used for military purposes, which obviously they’re not,” Musk said. “They’re just going into a humanoid robot.” Unfortunately, a shortage of humanoid robots isn’t the biggest potential issue of restricted access to China’s rare earth materials. China produces more than 90% of refined rare earth materials, which are vital for EVs, electronics, and yes, defense technology.

But this is far from the only delay Tesla is facing due to trade restrictions and tariffs. Trump’s recent tariffs slowed the progress on the upcoming self-driving Robotaxi by making some of the Chinese components necessary for the autonomous “Cybercab” inaccessible. In addition to the Robotaxi, the Tesla Semi hit delays. That’s particularly problematic for Tesla, as the electric vehicle marque already has commercial orders for the trucks.