China Tightens Rare-Earth Controls, Stocks Rally

China moved to tighten export controls on rare-earth elements and certain lithium battery shipments ahead of a possible meeting between Presidents Xi and Trump, sending ripples through markets.

Beijing’s actions spotlight supply-chain risks: China remains the dominant producer and processor of rare earths, which along with lithium underpin electric vehicles, consumer electronics and defense systems. Tighter rules increase the prospect of constrained exports, lifting the outlook for non‑Chinese producers.

U.S.-listed critical-minerals stocks rose on the news. USA Rare Earth surged about 15% to a record close after its CEO said the company is in direct contact with the U.S. government. MP Materials climbed roughly 2.4%. Lithium names also gained: Lithium Americas rose about 2.2% and Albemarle jumped about 5.3%, leading S&P 500 gainers that day. Several firms have attracted recent U.S. government investment or equity stakes as part of strategic industrial policy.

The moves underscore how geopolitical frictions can quickly alter pricing and investment in critical minerals. Market participants will watch whether tighter controls persist or are moderated by diplomatic talks, and how policymakers accelerate domestic supply, processing capacity and stockpiling to reduce reliance on a single supplier.