China Expands Controls

China announced expanded restrictions on rare earth materials and technology before the expected meeting between President Trump and President Xi Jinping later this month.

Context

China processes roughly 90% of the world’s rare earth minerals, making it the dominant supplier of materials critical to products ranging from smartphones to military equipment. Rare earth elements are essential components in electric vehicles, fighter jets, semiconductors, and advanced weaponry; they are also difficult and expensive to extract and refine. China has used its rare earth dominance as leverage in trade negotiations, including imposing restrictions earlier this year that caused global supply shortages before subsequent deals eased the crisis.

Restrictions

On Thursday, China’s Ministry of Commerce announced sweeping new export controls on rare earth materials, magnets, and related technologies. Foreign companies now need licenses from Beijing to export products containing more than 0.1% of Chinese-sourced rare earths or made using China’s extraction, refining, or manufacturing technology.