China's New Rare Earth Controls Rattle US Tech and Defense
Expanded export licensing rules threaten to disrupt critical supply chains for semiconductors, EVs, and military hardware.
China has significantly tightened its grip on the global supply of rare earth elements, implementing expanded export controls that pose a direct threat to key U.S. industrial and technology sectors. The move, which Beijing cites as a matter of national security, affects the nation's processing facilities that handle over 90% of the world's rare earths, creating profound uncertainty for American manufacturers.
The updated regulations require government approval for a wide range of shipments, impacting not just raw materials but also advanced components and processing technologies. This creates significant supply chain risks for industries reliant on the unique magnetic and electronic properties of these minerals. The U.S. defense industrial base is particularly exposed, as components for F-35 fighter jets, naval destroyers, and precision-guided munitions depend heavily on .
The restrictions extend deep into the commercial technology sector, threatening the production of electric vehicles, wind turbines, and advanced semiconductors. Automakers depend on rare earth magnets for high-efficiency EV motors, and the new rules could hamper production and innovation. These and the broader tech economy alike.
In response, Washington is accelerating efforts to build a more resilient domestic supply chain. The U.S. government is channeling significant investment into , invoking the Defense Production Act to support companies like MP Materials. However, experts caution that it will take years for the U.S. and its allies to meaningfully reduce their dependence on China's dominant market position.