China’s Rare Earth Export Restrictions Poses Threat To US Defence

The escalating trade war between the United States and the People’s Republic of China (PRC) is deepening a possible security risk to American defences.

This is the stark warning from a US think tank, the Center for Strategic and International Studies, which on Monday in a new report singled out the United States supply chain vulnerability centred around the rare earth supply from China.

Rare earth metals are commonly used in a range of consumer electronic products including semiconductors, mobile phones, electric vehicles, solar panels and LCDs. Rare earth elements (REE) crucial for a range of defence technologies.

Export restrictions

After Trump’s so called “Liberation Day” revealed sweeping “reciprocal” tariffs that now have been mostly paused for 90 days, the tariffs on Chinese imports to the US were raised to 125 percent, and then up to 145 percent.

Beijing then hit back and raised its tariffs on US goods from 84 percent to 125 percent.

China earlier this month also imposed export restrictions on seven rare earth elements and magnets used in defence, energy and automotive technologies, which has prompted a warning from the Center for Strategic and International Studies.

“On April 4, China’s Ministry of Commerce imposed export restrictions on seven rare earth elements (REEs) and magnets used in the defense, energy, and automotive sectors in response to US President Donald Trump’s tariff increases on Chinese products,” wrote the think tank.

“The new restrictions apply to 7 of 17 REEs – samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium – and requires companies to secure special export licenses to export the minerals and magnets.

The new restrictions are not a ban; rather they require Chinese companies to secure special licenses to export the resources.

China will also need to establish a licensing system and it remains to be seen how China will implement this system.

Supply chain vulnerability

“The United States is particularly vulnerable for these supply chains,” warned the think tank. “Until 2023, China accounted for 99 percent of global heavy REEs processing, with only minimal output from a refinery in Vietnam. However, that facility has been shut down for the past year due to a tax dispute, effectively giving China a monopoly over supply. China did not impose restrictions on light rare earths, for which a more diverse set of countries undertake processing.”

The Center for Strategic and International Studies noted that REEs crucial for a range of defence technologies, including F-35 fighter jets, Virginia- and Columbia-class submarines, Tomahawk missiles, radar systems, Predator unmanned aerial vehicles, and the Joint Direct Attack Munition series of smart bombs.

The F-35 fighter jet for example contains over 900 pounds (410kgs) of REEs, while an Arleigh Burke-class DDG-51 destroyer requires approximately 5,200 pounds (2,400kgs), and a Virginia-class submarine uses around 9,200 pounds (4,200kgs).

“The United States is already on the back foot when it comes to manufacturing these defence technologies,” said the think tank, whilst also pointing out that China is rapidly expanding its munitions production and acquiring advanced weapons systems and equipment at a pace five to six times faster than the United States.

And it warned that the US rare earths industry is not ready to fill the gap in the event of a shortfall, as there is “no heavy rare earths separation happening in the United States at present.”

Other countries

A number of countries are working to develop their light and heavy rare earths deposits, but China maintains a monopoly on refined heavy rare earths for the time being.

The think tank stated that Australia, Brazil, South Africa, Saudi Arabia, Japan, and Vietnam all have initiatives and investments underway to bolster key REE mining, processing, and research and development (R&D) as well as magnet manufacturing.

In 2023 Swedish mining company LKAB claimed to have found the largest rare earth deposit in Europe, located in the Kiruna area of northern Sweden.

The think tank urged the United States “to continue to provide financial and diplomatic support to ensure the success of these initiatives.”

Along with the export controls, Beijing has also placed 16 US entities – all but one in the defence and aerospace industries – on its export control list.

Critical materials

China in 2024 had also banned the exports to US of key materials including gallium, germanium, antimony and other key high-tech materials.

It came after Beijing in July 2023 had abruptly ordered export restrictions on two elements (gallium and germanium) critical for manufacturing semiconductors and communications equipment.

Gallium is a chemical element typically found in the form of a silvery metal that is used in semiconductors, electronics, solar panels, and LEDs.

Germanium meanwhile is used in the production of solid-state electronics, semiconductors, and fiber optic systems.

Antimony is listed as a mineral critical to US economic and national security by the US Department of Interior – a categorisation similar to rare earth elements cobalt, and uranium.