World

China’s Rare Earth Export Curbs: Will Tightened Controls Disrupt Global Magnet Supply Chains?

China tightens rare earth magnet export scrutiny, raising trade concerns and causing export drops.

October 14, 2025, 8:37 AM

Close-up of raw neodymium metal. Rare earth magnets like this power the strongest, most efficient EV motors.

Raw, striated neodymium metal. This rare earth element is essential for making the strong magnets in EV electric motors. By RHJPhtotos / Shutterstock.com.

Executive Summary

Chinese rare earth magnet manufacturers have faced increased scrutiny on export license applications since September, mirroring strictness seen during the peak of the U.S.-China trade dispute.

China’s overall rare earth exports dropped 31% in September, coinciding with Beijing’s formal expansion of controls over these critical minerals, set to take effect on November 8.

The tightened review process and expanded controls are causing significant uncertainty and anxiety among international industries reliant on rare earth magnets, with some companies experiencing delays and bottlenecks.

The Story So Far

China, as the world’s dominant supplier of rare earths crucial for global high-tech industries, has been increasing scrutiny on export license applications and formally expanded its export controls. These actions are occurring within the context of ongoing U.S.-China trade disputes, which have previously led to supply disruptions, and have prompted strong reactions from the United States, including initial threats from President Trump.

Why This Matters

China’s escalating scrutiny and expanded controls on rare earth magnet exports are poised to disrupt global supply chains for high-tech industries, creating significant uncertainty and anxiety for international manufacturers reliant on these critical materials. This move also raises questions about China’s commitment to trade truces and suggests it may be leveraging its dominance in rare earths as a geopolitical tool, potentially escalating trade tensions.

Who Thinks What?

Chinese rare earth magnet manufacturers and industry sources report experiencing increased scrutiny on export license applications since September, leading to delays and contributing to a decline in overall rare earth exports.

China’s government has formally expanded controls over rare earth exports and implemented a tightened review process for licenses, which industry sources suggest signals an intent to further control global magnet shipments.

President Trump initially threatened additional tariffs and retaliatory export bans in response to China’s expanded controls but later adopted a more conciliatory stance.

Chinese rare earth magnet manufacturers have been experiencing increased scrutiny on export license applications since September, according to industry sources. This comes even before Beijing’s recent expansion of controls over these critical minerals used in various high-tech applications. The tightened review process raises questions about China’s commitment to a trade truce with the U.S. and its potential intent to further control global magnet shipments.

Increased Scrutiny on Exports

The intensified scrutiny began in September, with applications now more frequently returned for additional information, sources familiar with the matter indicated. While approvals generally remain within the commerce ministry’s 45-business-day deadline, the current level of review mirrors the strictness seen in April, during the peak of the U.S.-China trade dispute.

That earlier period saw significant delays, leading to magnet shortages and production halts at automotive factories. The sources, who requested anonymity due to the sensitivity of the issue, declined to specify the exact duration of delays or the nature of the additional questions being asked.

Rare Earth Export Data

This development coincides with a 31% drop in China’s overall rare earth exports in September, according to data released this week. Although the data does not differentiate between various rare earth products, one source suggested that the difficulty in obtaining new licenses likely contributed to the decline.

China maintains its position as the world’s leading supplier of rare earths, a group of 17 elements essential for products ranging from electric vehicles and wind turbines to military radars and other advanced technology.

Expanded Controls and International Reaction

Last week, Beijing formally expanded its controls over rare earth exports, a move that prompted a strong reaction from the United States. President Trump initially threatened additional tariffs and retaliatory export bans, though he later adopted a more conciliatory stance. The new regulations are set to take effect on November 8.

The announcement of expanded controls has led to a surge of inquiries from foreign clients attempting to expedite orders before the new rules are implemented, sources noted. China’s commerce ministry did not respond to a Reuters request for comment on license approvals.

Industry Concerns

Adam Dunnett, Secretary-General of the EU Chamber of Commerce in China, confirmed that a primary concern for members remains the bottleneck in rare earth product applications. He added that the chamber has observed both approvals and delays for its members over recent weeks, with some companies facing extended waits without clear explanations.

Dunnett stated that the level of anxiety and concern among members has not decreased, highlighting the ongoing uncertainty in the market.

Outlook

The escalating scrutiny on rare earth magnet export licenses and China’s expanded controls signal a potential tightening of its global supply dominance. This situation creates uncertainty for international industries reliant on these critical materials, despite earlier commitments to facilitate trade.