China tightens control over rare earth exports
China has released MOFCOM Notification No. 62/2025, which contains sweeping new curbs on its rare earth exports, tightening Beijing's grip on the global supply of critical minerals.
But why would China do that? And what are the types of rare earths China is controlling?
China controls around 70 to 90% of global rare earths which are crucial for the production of a variety of products.
These include consumer electronics, digital technology, clean energy and electric vehicles, which are driving the green tech initiative, defense and aerospace.
Also affected are smartphones, computers, laptops, televisions and other displays.
Under the new rules, foreign companies will now need the Chinese government's approval to export products that contain even a tiny amount of rare earth and must declare the intended use.
China has imposed restriction on the export of Lithium batteries and some forms of graphite, which are also essential components in the global tech supply chain and largely produced in China.
They target the US, which has a significant rare earth mining industry but lacks processing facilities.
The US has one operational rare earth mine, but it does not have the facility or the capacity to separate heavy rare earths and has to send it all to China for processing,
Between 2020 and 2023, the US relied on China for 70% of its imported rare earth compounds and metals.
US manufacturing will be severely impacted due to halted shipments and limited inventories.
Especially hit will be the US warship production. Licenses will not be issued to them or certain companies in the chip industry.
Rare earths are used in many military fields, such as missiles radars and permanent magnets.
Defense technologies, including F-35 jets, Tomahawk missiles and Predator UAVs, all depend on these minerals.
This move by China has rekindled tensions between the world's two largest economies, with US President Donald Trump threatening to increase already substantial tariffs on Chinese imports by imposing an additional 100% tax by November 1, unless Beijing backtracks from its new restrictions.
The US is relying heavily on its European allies for a group response against China's supply chain management. But it is a strategic miscalculation, since these nations are already under severe US pressure.
India faces a 50% tariff to drop Russian oil.
The South Korean president openly stated that the US "tribute" demand will bankrupt the nation and Europe has admitted to signing one of the most "humiliating unequal treaties" last summer.
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