China tightened export controls on critical rare earth metals on Thursday.
The new restrictions were announced by China’s Ministry of Commerce and come ahead of a meeting between Chinese President Xi Jinping and US President Donald Trump scheduled for later this month.
The world’s two biggest economies are locked in trade negotiations aimed at easing tensions after agreeing to lift some tariffs after raising retaliatory tariffs on each other earlier this year.
Rare earth metals are one of China’s main levers of influence over the United States.
What did China announce?
In “2025 Announcement No. 61”, China announced that it will tighten export controls for five types of rare earth metals, in addition to the seven types announced in April of this year.
The five metals added to the list are holmium, erbium, thulium, europium, and ytterbium.
China imposed export restrictions on seven minerals earlier this year: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.
There are a total of 17 types of rare earth metals. The periodic table contains 15 lanthanides (metallic elements). scandium; and yttrium. China currently has export restrictions on 12 of these items.
Additionally, on Thursday, China also restricted exports of specialized technical equipment used to refine rare earth metals. Most of these restrictions will take effect from December 1st.
The announcement means foreign companies will need special approval from the Chinese government if they want to export rare earth magnets and certain semiconductor materials containing at least 0.1% of heavy rare earth metals from China.
To obtain a license, foreign companies must explain the use of the products they want to make using Chinese rare earth metals.
Why is China tightening its control over rare earths?
China cited national security interests as the reason for these new restrictions.
“Rare earth-related items have dual-use characteristics of civil and military use. Enforcing export controls on them is an international practice,” a spokesperson for China’s Ministry of Commerce told reporters on Thursday.
The spokesperson added that “certain” foreign organizations and individuals are directly transferring or processing and then transferring controlled rare earth materials originating from China to “directly or indirectly affiliated organizations and individuals for military and other sensitive uses.”
“This poses serious damage or potential threat to China’s national security and interests, adversely affects international peace and stability, and impedes global non-proliferation efforts.”
Rare earth metals are essential in the production of technological equipment such as electric vehicles, lithium-ion batteries, LED televisions, and camera lenses.
Metals are critical to the U.S. defense industry. According to the think tank Center for Strategic and International Studies (CSIS), rare earths are used to make F-35 fighter jets, Virginia-class submarines, Columbia-class submarines, Tomahawk missiles, radar systems, Predator unmanned aerial vehicles, and smart bombs for the Joint Direct Attack Munition series.
In addition, rare earths are also used in the production of semiconductors used in artificial intelligence (AI) technology.
Why is this important now?
Analysts say this is a strategic move on China’s part.
China is the largest producer of these rare earth metals. CSIS reported in 2024 that it mined at least 60 percent of the world’s rare earth metals and processed about 90 percent.
The new restrictions were announced just three weeks before President Trump’s visit to South Korea for the Asia-Pacific Economic Cooperation (APEC) summit in late October.
President Trump is scheduled to meet with President Xi during his visit. The last time the two leaders met in person was in 2019.
Earlier this year, President Trump imposed a 145% tariff on Chinese imports to the United States. China retaliated with 125% tariffs. After lowering tariffs to 30% and 10%, respectively, in May, the two countries signed a ceasefire in August, agreeing to a 90-day suspension to allow time for trade negotiations. The suspension has since been renewed twice as negotiations continue, most recently between U.S. and Chinese officials in Spain last month.
China’s new restrictions on rare earth metals, which President Trump is known to push for, will further increase China’s influence in these negotiations.
Gracelyn Bhaskaran, director of the CSIS Critical Minerals Security Program, explained that Washington’s defense industry faces significant challenges posed by limited production capacity to meet growing defense technology needs. By restricting exports, China could accelerate its military expansion faster than the United States.
“New restrictions will only deepen these vulnerabilities and further widen the capability gap,” Bhaskaran said.
“This move will strengthen China’s influence in future talks while undermining U.S. efforts to strengthen its industrial base amid rising tensions in the Indo-Pacific,” he said.
“Most (restrictions) will not take effect until December 1, 2025, leaving nearly two and a half months for negotiations.”
“China is willing to strengthen communication and cooperation through bilateral and multilateral export control dialogue mechanisms, promote compliant trade, and ensure the safety and stability of global industrial and supply chains,” a spokesperson for the Chinese Ministry of Commerce told reporters on Thursday.
Who will these new controls most impact?
The United States will be especially hard hit. In 2023, the company imported $22.8 million worth of rare earth products from China, making it China’s largest importer of rare earth minerals and products, according to the Office of Economic Complexity (OEC). In the same year, China exported a total of $117 million worth of rare earth metals and products.
The U.S. sourced 70% of its imports of rare earth compounds and metals from China between 2020 and 2023, according to a U.S. Geological Survey report.
Hong Kong ($12.1 million), Russia ($12.2 million) and Japan ($9.42 million) also imported significant amounts.
The United States restricted access to Chinese semiconductors in 2022 under the administration of former Democratic President Joe Biden. Some U.S. lawmakers are pushing for further regulation, warning that China could reverse engineer or develop advanced semiconductor technology on its own to overtake the United States in the industry and secure a military advantage.
Are there any exceptions to the limit?
yes.
A Commerce Department spokesperson said exports related to emergency medical needs for public health emergency response or disaster relief are exempt from the restrictions.
