China has imposed stricter export controls on rare earth elements, posing a threat to U.S. supply chains for clean energy and artificial intelligence.
The Ministry of Commerce announced on Thursday that it had implemented additional export restrictions to “safeguard national security and interests.” China is the world’s largest producer of rare earths, which are essential to energy and defense technologies. According to the U.S. Geological Survey, between 2020 to 2023, the U.S. imported nearly 56% of its rare earth compounds and metals from China.
The ministry said that technologies related to “rare earth mining, smelting, separation, metal smelting, manufacturing of magnetic materials, and recycling and utilization of rare earth secondary resources and their carriers” cannot be exported without permission.
The U.S. has sought to bolster its domestic critical mineral and rare-earth supply chain as it has increasingly been drawn into competition with China. For instance, the Department of War in July entered into a multimillion-dollar deal with MP Materials, a rare-earth producer, with the intention of helping it boost domestic supply.
The U.S. government has taken efforts in recent years to limit China’s access to cutting-edge technology used to develop artificial intelligence. Earlier this week, lawmakers revealed a report that Chinese chipmakers purchased $38 billion in advanced gear last year and called for “dramatically” expanding country-wide restrictions on chipmaking equipment from China.
The new restrictions come weeks before a planned meeting between Trump and Chinese President Xi Jinping in South Korea.
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“What’s particularly notable this time is the formalization of Beijing’s attempt to extend the extraterritorial reach of its export restrictions—reminiscent of the United States’ approach to chip export controls,” said Zoe Oysul, a senior policy analyst at the Center for Critical Mineral Strategy for SAFE, a nonprofit group. “It remains unclear how China intends to enforce this, whether it will find partners willing to cooperate, or what leverage it may use to compel compliance.”
The “Trump administration is meeting the urgency of the moment with rapid critical minerals deals, but these are long-term problems that will only be solved by a durable national strategy and international commitments to solving this problem,” Oysul said.
