China dominates 90% of global rare earth refining
The U.S. relies on China for ~70% of its rare earth imports
Export controls now cover not only raw materials, but also refined and processed rare earths
Licensing tightened on seven heavy rare earth elements
Only state-owned enterprises are permitted to conduct refining and smelting
Opinion
China’s move signals a strategic shift from reactive to proactive control over rare earths.
Rather than inflict short-term pain, Beijing appears focused on leveraging its supply chain dominance as a long-term bargaining chip in the U.S.–China trade conflict.
Core Sell Point
Industries heavily reliant on rare earths—such as defense, semiconductors, and aerospace—now face increased supply chain risk, with potential disruption to core materials sourcing.
In direct response to the U.S.'s 100%+ tariff escalation, China has significantly strengthened its export controls on rare earth elements. The new measures go beyond raw ore restrictions—covering the refining and processing stages as well, which will now be exclusively permitted for state-owned enterprises. The move is expected to substantially disrupt the supply chains of advanced industries and defense contractors in the U.S. and allied nations.
On April 4, China’s Ministry of Commerce announced export restrictions on seven heavy rare earths—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. Now, these restrictions have been expanded to include smelting and refining operations, effectively institutionalizing long-term controls rather than temporary measures.
China currently accounts for 90% of global rare earth refining capacity, and supplies around 70% of U.S. rare earth imports. The updated policy is designed to maximize domestic value capture while applying strategic pressure on the U.S. tech and defense sectors.
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