China Intensifies Export Controls on Rare Earth Minerals, Posing Threat to Global Supply
China has recently declared comprehensive new export controls on rare earth minerals and processing technologies. These controls necessitate foreign companies to secure special licenses for products containing even a minimal 0.1% of Chinese rare earth content. The restrictions, set to be effective from December 1, 2025, encompass 12 out of the 17 rare earth elements. This includes the newly added elements such as holmium, erbium, thulium, europium, and ytterbium.
These regulations introduce “foreign direct product” rules that echo the U.S. semiconductor restrictions. This move grants China extraterritorial control over the global supply chains of rare earth. Companies with military affiliations, including U.S. defense contractors, are likely to face presumptive license denials under these new regulations.
China holds a dominant position in the global rare earth production, mining 60% and processing 90% of the world’s supply. The timing of these restrictions aligns with the escalating U.S.-China trade tensions, just ahead of President Trump’s scheduled meeting with Xi Jinping at the APEC summit. This positions rare earths as a significant leverage tool in bilateral negotiations.
Source: CSIS Analysis