In a dramatic and purposeful gesture, China has imposed broad new limits on the export of rare earth minerals and related technologies, marking an unmistakable attempt to muster strategic clout ahead of a high-stakes meeting between President Donald Trump and Chinese leader Xi Jinping. The timing, magnitude, and intensity of the controls reflect how Beijing perceives rare earths not just as industrial materials, but as diplomatic leverage in an increasingly tense U.S.–China competition.
On Thursday, China’s Commerce Ministry rolled out an updated export regime that more directly tightens controls over technologies applied in the mining, smelting, recycling, and magnet-making process of producing rare earth. According to new regulations, any technology or component related to the rare earth business—including even trace materials—may now need government approval before they can be exported. Of particular note, Chinese firms are now generally barred from collaborating with foreign entities on rare earth projects unless pre-approved by the authorities. The new restrictions are being presented in Beijing as a national security issue. China alleges that foreign users in the past redirected Chinese-origin rare earth materials and technology into defense or dual-use applications—a claim Beijing argues requires more stringent controls. Known military or defense end users will have export licenses categorically denied under the updated regime. Requests about semiconductor manufacturing or artificial intelligence with possible military applications will be examined on a case-by-case basis.
While some of the controls become effective outright, others—such as extraterritorial provisions imposing China’s control over materials that have been processed overseas—are scheduled to take effect on December 1. With the extraterritorial provision, overseas producers that utilize Chinese-sourced rare earths—or whose production chains include Chinese refining or extraction technologies—can now be required to obtain export licenses even for products that have been processed overseas.
Experts interpret this as a clear message: while Trump and Xi are set to sit down on regional sidelines, Beijing is employing rare earths as a strategic card, intensifying its bargaining stance. This comes after previous curbs in April that previously rocked global supply chains. China’s stranglehold on processing—controlling more than 90 percent of refined rare earth production—grants it disproportionate power over global access to these minerals.
For the United States and its friends, the stakes are deep. Rare earths are a key element in high-tech electronics, electric vehicles, renewable energy systems, lasers, magnets, and weapons-grade hardware such as jet engines, guidance systems, and radar arrays. Already, numerous international companies complain of interruptions to buying and licensing backlogs.
U.S. defense contractors and chip makers are under immediate uncertainty. The new regulations directly bar export licenses to military consumers, and force a case-by-case evaluation for sensitive technologies related to chips or AI with potential military applications. This might hinder or slow shipments critical to chip fabs, high-performance computing systems, or even future weaponry. At the same time, the threat of compelled technology transfer or excessive dependence on Chinese inputs hangs over larger than ever.
The timing is not coincidental. As the planned Trump-Xi summit draws near at the Asia-Pacific Economic Cooperation conference, China appears determined to come into the high-stakes negotiations with a more fortified hand. Relying on its near-monopoly position in processing rare earths, Beijing is reminding Washington of how deeply exposed some supply chains are.
Diplomatic and economic responses from other countries are already brewing. Within Europe, manufacturing companies that depend on rare earth magnets are sounding alarms at interruptions. The U.S. administration, for its part, has been stepping up efforts to build up native rare earth mining and processing capability and to solidify ties with other mineralized countries. U.S. congressmen, especially defense committees, have long sounded the alarm over the strategic risks of dependence on Chinese supply lines.
Other analysts warn, however, that Beijing’s aggressive stance could rebound against it. Excessive licensing restrictions or abrupt cutoffs could prompt international customers to hasten diversification. Already, Australian, Canadian, US, and African areas are working on mining and processing projects. China’s prosperity hinges on continuing to prove reliable in its exports; driving away major industrial customers could undermine its bargaining clout.
Domestically, the Chinese government also tightropes. Some export permits—particularly for non-military, civilian uses—will continue to be issued, and facilitation procedures have been promised by the Commerce Ministry to prevent extreme dislocation of essential sectors. But making judgments about what is “sensitive” or “dual-use” will continue to be subjective and inconclusive—a framework that leaves Beijing with maximum discretion.
Foreign companies now have to navigate a foggy new landscape. Exporters need to look into whether their supply chains contain any Chinese-origin rare earth materials or technology. Licenses could be denied not only for entire parts but also for pieces or residues of Chinese-style processing. This added dimension introduces legal and compliance risk into international manufacturing.
Briefly, the update constitutes a strategic escalation. Rare earths, a technical commodity of the past, are now more a weapon of geopolitical competition. China, by tightening its control, is challenging whether Washington—and, more broadly, its allies—can credibly extricate itself from Chinese control of key minerals.
With the Trump-Xi meeting looming, both parties are now approaching the encounter with an added layer of material tension. For Washington, the message is unmistakable: strategic autonomy in areas such as semiconductors, defense, and EVs needs to be more than just rhetoric. For Beijing, the bet is that critical leverage will find expression in positive terms at the bargaining table.
But aside from diplomacy, actual shockwaves fall in factories, laboratories, and supply chains around the world. Whether China’s gamble seals hegemony or hastens diversification will hinge on how consistently it implements its controls—and how quickly others can adjust.
