Bombshell Trade Wars – China Imposes New Export Controls on Key Rare Earths, Threatening U.S. Supply Chains and Economic Security

Highlights

• China’s Ministry of Commerce announces export restrictions on seven rare earth elements crucial for military, semiconductor, and renewable energy technologies.
• The move threatens U.S. industrial capabilities, with over 90% of heavy rare earths currently imported from China.
• Experts call for urgent domestic rare earth mining and processing to mitigate potential strategic vulnerabilities.

---

In a move with sweeping implications for the global high-tech and defense industries, China’s Ministry of Commerce (opens in a new tab) has announced immediate export controls on seven rare earth-related elements critical to advanced manufacturing. The restricted elements—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—are used in military systems, semiconductors, electric vehicles, and renewable energy technologies.

Reported in CGTN (opens in a new tab), (China Global Television Network), the international arm of China Central Television (CCTV) and a key part of China Media Group (CMG), a state-run media organization under the control of the Central Propaganda Department of the Chinese Communist Party, Rare Earth Exchanges warns that this decision could severely disrupt U.S. supply chains and underscores an escalating geopolitical risk to America’s industrial base. The timing and breadth of these controls suggest a strategic effort by China to assert dominance over materials that are vital to both economic competitiveness and national defense.

These medium and heavy rare earths are not easily replaceable and represent the start of a blowback and crises triggered as part of President Donald Trump’s global trading system reset. This export restriction will create immediate price spikes, contract instability, and long-term uncertainty for U.S. manufacturers. More importantly, it exposes the fragility of U.S. and western overdependence on a single foreign supplier.

The Chinese government described the move as a measure to safeguard national interests and cited the “dual-use” nature of these elements—a designation typically reserved for materials with both civilian and military applications. While China claims the export controls align with international non-proliferation norms, analysts note that these elements are at the core of emerging military technologies, precision-guided weapons, radar systems, and quantum computing.

The U.S. currently imports over 90% of its heavy rare earths from China. The newly restricted elements are central to the production of permanent magnets, defense electronics, lasers, nuclear medicine, and clean energy systems. Without access to these materials, the U.S. risks production bottlenecks, delayed technology rollouts, and diminished strategic autonomy.

Rare Earth Exchanges calls on U.S. industry leaders and policymakers to immediately respond by fast-tracking domestic rare earth mining, processing, and refining capabilities and supporting the development of secure, transparent rare earth spot markets and inventories. As Rare Earth Exchanges has continued to call out, this requires industrial policy. The current White House executive order is not nearly sufficient. Failure to act decisively could leave the United States vulnerable to future supply shocks and economic coercion.

China’s Ministry of Commerce