https://robertbryce.substack.com/p/china-inc-tightens-the-rare-earth
By Robert Bryce
In August, companies in the European Union halted production on seven occasions due to shortages of rare earths from China. In September, the EU Chamber of Commerce expected the number of work stoppages would increase to nearly 50. According to Bloomberg, since April, the flow of rare-earth magnets from China to European companies has “collapsed,” a move that is “disrupting major industries from electric vehicles to wind turbines.”
China’s reduction of rare-earth magnet exports to Europe was only a warm-up. Yesterday, China’s Ministry of Commerce announced far-reaching restrictions on rare earth elements and high-strength magnets. The move comes just days ahead of President Donald Trump’s visit to South Korea, where he may meet with Chinese President Xi Jinping.
In a notice published yesterday, the Ministry of Commerce said that Chinese rare earths have been exported to other countries where they are being used for military purposes. “This has caused significant damage or potential threats to China’s national security and interests, international peace and stability, and undermined international non-proliferation efforts.” It continued, stating that the Chinese government would restrict the export of rare earths with the goal of “better safeguarding national security and interests.”
None of this should be surprising. As I have noted in several recent pieces, China has repeatedly used rare earth exports as a trade weapon. (See this piece from May: “China Inc. Has The West In A Strategic Metals Stranglehold,” and this piece from June: “Anti-Magnetic.”) But yesterday’s move is astonishing in its scope and scale. It’s also another reminder that for decades, the US and other Western countries have been sleepwalking when it comes to critical supply chains, key metals, and strategic elements.
Here’s an analysis of the Ministry of Commerce’s “Announcement of the Decision to Implement Controls on Exports of Rare Earth-Related Items to Foreign Countries,” and what it means for US national security, AI, and semiconductors.
