The United States will press its case at the World Trade Organization against China's restrictions on rare-earth exports, a US official said.
The rare-earths, a collective name for 17 metals, are crucial in the manufacture of a host of items, from iPods, low-emission cars and computers to missiles, and China has 95 percent of the world's rare-earths.
The Obama administration, in the case to be filed jointly with Japan and the European Union, will seek WTO help in facilitating formal consultations with China about its limits on rare-earth exports, The Washington Post reported.
The trade case is expected to show China has a near-monopoly over such critically needed materials.
China has not been concerned about showing its dominance over the rare-earths market as happened in 2010 in a territorial dispute with Japan.
In that incident, the Post said China halted the shipment of anything with rare earths to Japan, causing a temporary panic among electronics manufacturers.
China lately has restricted its rare-earth exports, saying the substances are needed for domestic use. The United States planned to show such export restrictions give Chinese companies an unfair advantage, the Post quoted US officials as saying.
Reacting immediately to the US plans, China's official news agency Xinhua in a commentary Tuesday said the US decision against its rare-earth export quotas "is likely to hurt bilateral trade ties and trigger a backlash from China instead of settling the rift."