Highlights
- China’s Ministry of Commerce introduces sweeping export controls on rare earth magnets.
- The controls target key elements used in high-tech and defense applications.
- New regulations require complex licensing for NdFeB magnets containing specific rare earth elements.
- These restrictions could potentially cause significant supply chain disruptions.
- The export restrictions aim to strategically leverage China’s 90% global rare earth magnet production.
- This move signals economic and geopolitical pressure on Western nations.
Despite what seemed like a successful sit down between the Chinese and American trade delegations, China’s Ministry of Commerce has formalized and escalated its grip on global rare earth supplies with a sweeping new export control regime that tightens restrictions on permanent magnet materials containing terbium (Tb), dysprosium (Dy), samarium (Sm), scandium (Sc), and yttrium (Y). These controls—codified in Export Control Announcement No. 18 of 2025 and detailed in the updated NdFeB Magnet Export Procedure as of May 14—impose licensing, testing, and documentation hurdles that may delay shipments for over 45 days, effectively weaponizing bureaucratic friction in a geopolitically charged market.
Rare Earth Exchanges (REEx) earlier reported a summary of this unfolding situation via CNBC.
At the heart of the crackdown is a requirement that any NdFeB magnets containing dysprosium or terbium—key elements for high-performance magnets used in missiles, fighter jets, and electric vehicles—must obtain a Dual-Use Export License from China’s Ministry of Commerce. This includes an arduous approval process involving third-party composition testing, end-user certification, and government approval from both the manufacturer and the importer. Permanent magnets containing samarium and other REEs are likewise categorized under “controlled items,” blocking any blind spot in the REE supply chain.
Back to the Future
Critically, China has not lifted the April 4 rare earth export restrictions targeting the U.S., even after recent trade talks in Geneva. Instead, a flowchart obtained by REEx reveals an intentional slowdown strategy, adding 45+ day delays for magnets with Dy or Tb, plus scrutiny of documents, signatures, and end-use justifications. Any noncompliance or incomplete documentation restarts the clock.
As China controls roughly 90% of global rare earth magnet production, these steps are not merely regulatory—they’re economic chokeholds aimed squarely at America’s energy transition, defense production, and tech sector.
What’s the Implication?
Well, the implications are severe. With China openly signaling the strategic value of rare earths via state media, calling out “strangulation” of U.S. defense, Western manufacturers are now staring down long-term uncertainty. These measures do not just raise costs—they raise questions about the reliability of any China-based supply. The time has come for the U.S., EU, Japan, and allies to build secure, independent REE-to-magnet supply chains. Beijing has shown its hand: rare earths are no longer just commodities—they’re coercive tools of power.
West and especially America—time to consider rare earth element industrial policy!
Discuss more at Rare Earth Exchanges Forum (opens in a new tab).
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