China tightens export controls on rare-earth metals: Why this matters

China tightened export controls for captious rare-earth metals connected Thursday.

The caller restrictions were announced by the Chinese Ministry of Commerce, and travel up of an expected gathering betwixt Chinese President Xi Jinping and United States President Donald Trump’s aboriginal this month.

The world’s 2 largest economies person been locked successful commercialized negotiations aimed astatine calming tensions, aft they raised tit-for-tat tariffs against each different earlier this year, earlier past agreeing to propulsion backmost connected immoderate of those levies.

Rare-earth metals are 1 of China’s large levers of power with the US.

What has China announced?

In “announcement fig 61 of 2025”, China said it was expanding export controls for 5 rare-earth metals successful summation to the seven it announced successful April this year.

The 5 metals added to the database are holmium, erbium, thulium, europium and ytterbium.

The 7 minerals China placed export restrictions connected earlier this twelvemonth are samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium.

There are 17 rare-earth metals successful full – the 15 lanthanides (metallic elements) connected the periodic table; scandium; and yttrium. China present has export restrictions connected 12 of them.

In addition, connected Thursday, China besides placed restrictions connected the export of specializer technological instrumentality utilized to refine rare-earth metals. Most of these restrictions volition spell into effect from December 1.

The announcement means that overseas companies volition request to get peculiar approvals from Beijing if they privation to export rare-earth magnets and definite semiconductor materials that person astatine slightest 0.1 percent dense rare-earth metals from China.

To get the licence, overseas companies indispensable explicate the intended usage of the merchandise they privation to usage Chinese rare-earth metals to make.

Why has China tightened power implicit uncommon earths?

China cited nationalist information interests arsenic the crushed for these caller restrictions.

“Rare-earth-related items person dual-use properties for some civilian and subject applications. Implementing export controls connected them is an planetary practice,” a Chinese Ministry of Commerce spokesperson told reporters connected Thursday.

The spokesperson added that “certain” overseas organisations and individuals person been straight transferring – oregon processing and past transferring – controlled rare-earth materials originating from China to “relevant organisations and individuals straight oregon indirectly for subject and different delicate applications”.

“This has caused important harm oregon posed imaginable threats to China’s nationalist information and interests, adversely affected planetary bid and stability, and hindered planetary non-proliferation efforts.”

Rare-earth metals are indispensable for the accumulation of technological instrumentality specified arsenic electrical cars, lithium ion batteries, LED televisions and camera lenses.

The metals are important for the US defence industry. According to the Center for Strategic and International Studies (CSIS) deliberation tank, uncommon earths are utilized to manufacture F-35 combatant jets, Virginia and Columbia-class submarines, Tomahawk missiles, radar systems, Predator unmanned aerial vehicles and the Joint Direct Attack Munition bid of astute bombs.

Additionally, uncommon earths are utilized to make semiconductors, which are utilized successful artificial quality (AI) technology.

Why does this substance now?

This is simply a strategical determination connected the portion of China, analysts say.

China is the largest shaper of these rare-earth metals. It mines astatine slightest 60 percent and processes astir 90 percent of the world’s rare-earth metals, CSIS reported successful 2024.

The caller restrictions person been announced conscionable 3 weeks earlier Trump’s sojourn to South Korea to be the Asia-Pacific Economic Cooperation (APEC) acme successful precocious October.

During his visit, Trump is expected to conscionable with Xi. The leaders past met successful idiosyncratic successful 2019.

Earlier this year, Trump imposed tariffs of 145 percent connected Chinese imports to the US. China retaliated with 125 percent tariffs. After reducing their tariffs to 30 percent and 10 percent respectively successful May, the 2 sides struck a truce successful August – agreeing a 90-day intermission to let clip for commercialized talks. That intermission has since been renewed doubly arsenic talks proceed – astir precocious betwixt US and Chinese officials successful Spain past month.

China’s caller restrictions connected rare-earth metals, which Trump is known to privation badly, springiness it much leverage for these talks.

Gracelin Baskaran, manager of the CSIS Critical Minerals Security Program, explained that Washington’s defence manufacture is facing important challenges caused by its constricted accumulation quality to conscionable rising defence exertion needs. By restricting exports, China whitethorn beryllium capable to accelerate the enlargement of its subject spot astatine a faster gait than the US.

“The caller restrictions volition lone deepen these vulnerabilities, further widening the capableness gap,” Baskaran said.

“The determination some strengthens Beijing’s leverage successful upcoming talks portion besides undercutting US efforts to bolster its concern basal astatine a clip wherever Indo-Pacific hostility is climbing,”  she said.

“Most [restrictions] don’t spell into effect until December 1, 2025, leaving adjacent to 2.5 months for these negotiations.”

The Chinese Ministry of Commerce spokesperson told reporters connected Thursday: “China is consenting to fortify connection and practice done bilateral and multilateral export power dialog mechanisms, beforehand compliant trade, and guarantee the information and stableness of planetary concern and proviso chains.”

Who volition these caller controls impact the most?

The US volition beryllium particularly deed hard. In 2023, it was the largest importer of Chinese rare-earth minerals and products, importing $22.8m worthy of uncommon world products from China, according to the Observatory of Economic Complexity (OEC). In total, China exported $117m successful rare-earth metals and products that year.

The US sourced 70 percent of its uncommon world compounds and metals imports from China betwixt 2020 and 2023, according to a US Geological Survey report.

Hong Kong ($12.1m), Russia ($12.2m) and Japan ($9.42m) besides import important amounts.

The US restricted China’s entree to its semiconductors successful 2022 nether the medication of Democratic erstwhile President Joe Biden. Some US lawmakers person pushed for adjacent greater restrictions, informing that China could reverse-engineer oregon independently make precocious semiconductor technologies, overtaking the US successful the manufacture and securing a subject advantage.

The past clip they met: US President Donald Trump and China’s President Xi Jinping be a bilateral gathering during the G20 leaders acme successful Osaka, Japan, connected June 29, 2019 [Kevin Lamarque/Reuters]

Will determination beryllium immoderate exceptions to the restrictions?

Yes.

The Commerce Ministry spokesperson said that exports pertaining to exigency aesculapian needs, successful effect to nationalist wellness emergencies oregon for catastrophe relief, volition beryllium exempt from the restrictions.