Selective restrictions target heavy rare earths vital to electric vehicles, wind turbines, and defense systems.

By yourNEWS Media Newsroom

China has imposed new export restrictions on rare earth minerals critical to the United States’ defense, energy, and technology sectors in response to President Donald Trump’s latest tariff hikes. While not a full embargo, the move is expected to severely disrupt the delivery of several strategic elements, including those essential to electric vehicle (EV) production, green energy infrastructure, and military electronics.

The 17 elements classified as rare earth minerals include fifteen lanthanides, which share similar atomic properties, along with scandium and yttrium. Originally thought to be scarce due to their complex extraction processes, these metals have since been found in large quantities, particularly in China, which now holds a near-monopoly on refining and processing operations.

China controls around 30% of the world’s known reserves but commands 85% of the global rare earth processing capacity. At its market peak 15 years ago, China supplied 97% of the global rare earth supply. This dominance has been enabled in part by its disregard for environmental regulations—constraints that have hindered U.S. companies from scaling up domestic production.

Rare earths require complex refinement due to their entanglement with other minerals in natural ore. This intensive separation process is costly and environmentally challenging. While the U.S. was the birthplace of modern rare earth refining, Chinese researchers made substantial technical advances during America’s retreat from the sector.

As demand soared for components used in EV motors, wind turbines, and military applications, China’s leadership took strategic steps to dominate global supply chains. As early as 1987, President Deng Xiaoping remarked, “The Middle East has oil. China has rare earths”.

The new export controls target seven specific elements: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These “heavy” rare earth elements (HREEs) are essential for producing high-performance magnets that retain strength at high temperatures—a requirement in advanced military systems and green technologies.

Lighter rare earths, which are easier to obtain from non-Chinese sources, were excluded from the new restrictions. However, because China still dominates HREE processing globally, the impact of these restrictions will be widespread.

The U.S. Department of Defense has committed nearly $500 million toward creating a domestic “mine to magnet” supply chain. The Mountain Pass mine in California produced 45,000 metric tons of rare earth oxides in 2024, compared to China’s 270,000 metric tons during the same period. There is currently no heavy rare earth refinery operating in the United States, though projects are under development in Texas. Vietnam hosted the only HREE facility outside China, but it was shut down last year over tax issues.

While China has paused—not halted—exports to the U.S., it is enacting new licensing protocols that could delay deliveries. Additionally, China has blacklisted American defense firms it accuses of threatening Chinese national security, particularly those with business ties to Taiwan, likely making it difficult for those firms to receive rare earth shipments.

This isn’t the first time Beijing has weaponized its rare earth monopoly. In 2010, after the Japanese coast guard detained a Chinese fishing boat captain near the contested Senkaku Islands, China retaliated by cutting off rare earth supplies to Japan. The embargo forced Tokyo to release the captain but not before enduring years of economic strain. Japan implemented a counter-strategy that included diversifying suppliers, investing in efficient manufacturing methods, and building stockpiles. It reduced dependence on Chinese exports from 90% to 60%.

Despite these efforts, China’s grip on heavy rare earths remains tight. Without urgent development of domestic processing capacity, the United States remains vulnerable to geopolitical leverage.