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China restricting exports of rare earth, related tech

HONG KONG — China outlined new curbs on exports of rare earths and related technologies on Thursday, extending controls over use of the elements critical for many high-tech and military products ahead of a meeting in about three weeks between President Donald Trump and Chinese leader Xi Jinping.

The regulations announced by the Ministry of Commerce require foreign companies to get special approval to export items that contain even small traces of rare earths elements sourced from China even if those products were made elsewhere by foreign companies. These critical minerals are needed in a broad range of products, from jet engines, radar systems and electric vehicles to consumer electronics including laptops and phones.

Beijing also will impose permitting requirements on exports of technologies related to rare earths mining, smelting, recycling and magnet-making, it said. And any request to use rare earths for military purposes is expected to be rejected.

China accounts for nearly 70% of the world’s rare earths mining. It also controls roughly 90% of global rare earths processing. Access to such materials is a key point of contention in trade talks between Washington and Beijing.

As Trump has raised tariffs on imports of many products from China, Beijing has doubled down on controls on the strategically vital minerals, raising concerns over potential shortages for manufacturers in the U.S. and elsewhere.

It was not immediately clear how China plans to enforce the new policies overseas.

Gracelin Baskaran, director of the Critical Minerals Security Program at the Washington-based Center for Strategic and International Studies, said it’s clear that “Beijing’s rare earth policy has evolved into a potent instrument of economic and geopolitical leverage.”

Strategic move

During a cabinet meeting Thursday, Trump said he had yet to be briefed on the new rules but suggested that the U.S. could stop buying Chinese goods. “We import from China massive amounts,” Trump said. “Maybe we’ll have to stop doing that.”

Neha Mukherjee, a rare earths analyst at Benchmark Mineral Intelligence, called the new export controls “a strategic move by China that mirror some of Washington’s new chip export rules.

“Most rare earth magnet manufacturers in the U.S., Japan and elsewhere remain heavily dependent on rare earths from China, so these restrictions will force some difficult decisions — especially for any company involved in military uses of rare earths because most of those export licenses are expected to be denied, he said.

“The message is clear: if the U.S. and its allies want supply chain security, they must build independent value chains from mine to magnet,” Mukherjee said.

Restrictions at key time

The new restrictions are to “better safeguard national security” and to stop uses in “sensitive fields such as the military” that stem from rare earths processed or sourced from China or from its related technologies, the Commerce Ministry said.

It said some unnamed “overseas bodies and individuals” had transferred rare earths elements and technologies from China abroad for military or other sensitive uses which caused “significant damage” to its national security.

The new curbs were announced just weeks ahead of an expected meeting between Trump and Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea, that begins at the end of this month.

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Funk reported from Omaha, Nebraska. AP writers Didi Tang contributed from Washington and Sam McNeil contributed from Brussels.

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