China Tightens Rare Earth Controls, Threatening U.S. Defense Supply Chains

China has announced tighter controls on exports of certain rare earth elements and high-performance magnets, raising immediate concerns for U.S. defense supply chains.
The restrictions target processed materials and finished neodymium-iron-boron (NdFeB) magnets used in motors, actuators, sensors and guidance systems. While the raw elements themselves are not extremely scarce, the vulnerability lies in refining, alloying and magnet-manufacturing capacity, which remain heavily concentrated in China.
Defense contractors and policymakers warn that sudden limits on exported magnets or precursor materials could delay production of munitions, aircraft components and precision electronics. The move highlights a structural risk: supply-chain choke points where a single country controls critical processing steps even if ores are globally distributed.
Response options under consideration include accelerating domestic and allied capacity for separation and refining, subsidizing magnet manufacturing, expanding recycling of rare-earth materials, stockpiling strategic inventories, and diversifying upstream mining partners. Building end-to-end supply chains is technically complex and capital intensive, requiring years of investment and regulatory coordination.
Analysts say the measures will pressure Western governments to act quickly to reduce dependence, while also amplifying geopolitical leverage for China in future trade and security disputes.