Highlights
- China controls approximately 60% of the global rare earth supply and 90% of refining capacity, thereby exerting significant geopolitical leverage.
- Export licenses are limited and temporary, designed to retaliate against Western tech sanctions.
- Western industries remain vulnerable to potential supply disruptions in critical technology and defense sectors.
A new report (opens in a new tab) from CNBC confirms what Rare Earth Exchanges (REEx) and global industry stakeholders have long warned: China’s stranglehold over the rare earths supply chain remains intact, despite the illusion of easing trade tensions.
On the Money
CNBC’s analysis, led by Evelyn Cheng and colleagues, correctly highlights several urgent realities. First, China’s rare earth monopoly is not simply about mining—Beijing controls 60% of the global supply and 90% of refining capacity, giving it de facto authority over every rare earth-dependent sector, from electric vehicles and semiconductors to missiles and fighter jets.
Second, the piece accurately portrays the false sense of relief provided by China’s recent approvals of limited export licenses.
Companies such as Baotou INST have confirmed these permits often apply to a single shipment, and European automakers are operating on six-month license windows—hardly the foundation for long-term supply chain security. Lastly, the article aptly frames Beijing’s licensing regime as permanent leverage, one designed to retaliate against Western tech sanctions and deter rare earth stockpiling. Supply disruptions are not exceptions—they are part of the new geopolitical normal.
MIA
The report understates the strategic intent behind China’s rare earth export regime. This is not a temporary policy imbalance—it is a core pillar of Beijing’s asymmetric power projection. Missing from the piece is the fact that U.S. defense systems, including the F-35 fighter jet, are already facing shortages of samarium, and that Western manufacturers are shutting down or rationing production due to withheld rare earths like terbium and dysprosium.
CNBC also underplays the collapse of Western rare earth competitiveness, driven not just by cost, but by China’s deliberate underpricing to crush rival producers, as noted by Almonty Industries CEO Lewis Black. Rebuilding those capabilities will require public-private investment on an industrial policy scale, something the article stops short of addressing.
Despite superficial progress in trade talks, China’s rare earth weaponization is fully operational. The West remains unprepared. Until serious upstream-to-downstream alternatives are funded, scaled, and protected, global industries—from defense to EVs—will remain vulnerable to the next licensing delay or political retaliation.
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