China Tightens Rare Earth Export Rules

China has expanded curbs on rare earth exports and related technologies, prompting urgent warnings from Europe’s automotive sector about potential supply-chain disruption.

The German Association of the Automotive Industry (VDA) said the measures could have "far-reaching consequences" for deliveries to Germany and Europe, and called on policymakers in Brussels and Berlin to press Beijing for a swift solution. The VDA and industry analysts say the restrictions will hit battery and semiconductor supply chains — and therefore electric vehicle production — particularly hard.

Roberto Vavassori, chairman of Italian parts lobby ANFIA, said manufacturers’ buffers built during earlier disruptions are waning and reserves risk being depleted. ING economist Rico Luman noted China controls roughly 60% of rare earth production and about 90% of global refinery capacity, creating a structural bottleneck.

Beijing says the curbs are aimed at preventing military misuse of sensitive materials and has signaled it is "not afraid" of trade escalation after U.S. tariff threats. Some inventories in European storage facilities could delay immediate crises, but shortages of specific elements are possible and outcomes will hinge on upcoming talks with China.

Demand for rare earths is expected to surge as the clean-energy transition accelerates, raising stakes for industrial policy and supply diversification.