❓WHAT HAPPENED: China has announced new export controls on rare earth minerals and equipment, targeting industries reliant on these resources.
👤WHO WAS INVOLVED: China’s Commerce Ministry, President Donald J. Trump, U.S. defense contractors, and global industries dependent on rare earths.
📍WHEN & WHERE: Export restrictions take effect immediately domestically, with extraterritorial rules beginning December 1, ahead of the APEC summit in South Korea.
💬KEY QUOTE: “Rare earth-related items have dual-use characteristics. It is common international practice to impose export controls on them.” – Chinese Commerce Ministry spokesman
🎯IMPACT: The measures could disrupt global supply chains, particularly for U.S. defense contractors and industries reliant on rare earths.
China has imposed new restrictions on exporting rare earth minerals and other critical materials, likely impacting U.S. and. European manufacturers and defense industries. The new export controls were detailed in two notices from China‘s Commerce Ministry on Thursday.
China, which dominates the global supply of rare earths, stated that the measures are necessary to “safeguard national security and interests.” Under the new rules, foreign exporters of products containing rare earths sourced from China must obtain licenses from Beijing’s commerce ministry. Licenses for products with “military use” will largely be denied, according to Chinese authorities.
The rules also bar Chinese firms from cooperating in specified fields and deny export licenses to foreign entities classified as dual-use or military end users. These restrictions could directly affect American companies that supply the U.S. Department of War. Export applications for advanced semiconductor-related items will now be reviewed on a case-by-case basis.
A Chinese Commerce Ministry spokesman stated, “For some time now, some foreign organizations and individuals have been transferring or supplying controlled rare earth items originating in China, either directly or after processing, to organizations and individuals concerned for direct or indirect use in sensitive areas such as the military, causing significant harm or posing a potential threat to China’s national security and interests.”
The new rules are seen as a strategic move by Beijing ahead of a planned meeting between President Donald J. Trump and Chinese President Xi Jinping at the APEC summit in South Korea. Beijing controls 60 percent of global production and an estimated 90 percent of processing, giving it significant leverage in negotiations with the United States.
The National Pulse reported earlier this year that President Trump had loosened some tariffs on China on the understanding that Beijing would reciprocate by removing certain controls on rare earth minerals. However, in June, U.S. trade negotiators in Geneva, Switzerland, accused China of having failed to lift export restrictions, citing that U.S. manufacturers who have reported significant delays in securing rare earth shipments, with some suppliers demanding sensitive information, such as photos of end-user facilities, to complete applications.
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