1. Control Requirements
On April 4, 2025, China's Ministry of Commerce (MOFCOM) and the General Administration of Customs placed seven medium and heavy rare earth elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — under export licensing, together with the metals, alloys, oxides, compounds, and permanent magnets made from them. Exporters must obtain a dual-use license from MOFCOM for each shipment and declare the control number at customs.[1]
On October 9, 2025, Beijing escalated: five more elements, processing equipment and technology were added, and foreign-made products containing as little as 0.1 percent Chinese-origin rare earths by value were brought under Chinese licensing — an extraterritorial rule modeled on the U.S. Foreign Direct Product Rule.[2] Following the Trump–Xi meeting, these October measures were suspended on November 7, 2025 for one year (until November 10, 2026); the core April 2025 licensing regime remains fully in force.[3]
Table 1. The seven rare earth elements controlled since April 4, 2025
Element | Symbol | Key end uses |
Samarium | Sm | SmCo permanent magnets for aerospace and defense |
Gadolinium | Gd | MRI contrast agents; NdFeB magnet additive |
Terbium | Tb | Coercivity enhancement in EV and wind-turbine magnets |
Dysprosium | Dy | High-temperature NdFeB magnets; EV motors |
Lutetium | Lu | Medical PET scanners; advanced optics |
Scandium | Sc | High-strength aluminum alloys for aerospace |
Yttrium | Y | Phosphors, ceramics, lasers, thermal barrier coatings |
2. Export License Issuance
The regime is a licensing system, not a ban — but approvals are slow and selective. Each shipment requires an end-user certificate and full value-chain documentation; in practice, reviews have taken two to four months, and applications linked to foreign military programs are in principle rejected. The first licenses emerged in mid-May 2025, granted to magnet producers supplying Europe and Vietnam — but not the United States.[4]
The result is a deliberately uneven flow. From May 2025 through February 2026, Chinese exports of controlled rare earth compounds and metals to the United States fell 93 percent year over year (from 792 to 56 metric tons), while magnet exports — 44 percent of them to the European Union in early 2026 — ran at or above normal levels. Japan, an early recipient of licenses, saw shipments of controlled materials nearly halt after new restrictions in January 2026.[5]
3. The Crackdown on Rare Earth Smuggling
In May 2025, China launched a multi-agency "Special Action to Crack Down on Strategic Mineral Smuggling," involving police, customs, and state security. Reported rare-earth-related customs cases rose from 91 to 317 in 2025.[6] Notable cases include the July 2025 interception — on a tip from a U.S. company — of a 300-ton shipment of disguised rare earth minerals worth about 80 million U.S. dollars, and the seizure at Shenzhen port of 25 tons of NdFeB magnetic powder falsely declared as "tile adhesive." In May 2026, two Japanese nationals were detained in Dalian on suspicion of smuggling export-controlled rare earth products.[7]
In June 2026, MOFCOM formalized a whistleblower program: real-name informants receive official rewards, and freight forwarders, banks, and other intermediaries are now legally obliged to report suspected violations — institutionalizing an enforcement perimeter that keeps widening.[8]
4. Outlook
China's rare earth controls have become a durable, layered system: a standing licensing regime, a suspended extraterritorial apparatus with a November 10, 2026 trigger date, and an increasingly sophisticated enforcement machine. For downstream industries, the practical lesson is that license issuance — not the letter of the law — is the true control variable, and November 2026 is a hard planning horizon.
[1]Ministry of Commerce and General Administration of Customs of the PRC, "Announcement No. 18 of 2025," April 4, 2025, english.mofcom.gov.cn.
[2]Center for Security and Emerging Technology (Georgetown University), English translation of MOFCOM Notice 2025 No. 61, October 9, 2025.
[3]Clark Hill PLC, "China Hits 'Pause' on Rare-Earth Export Controls and What It Means for Supply Chains," November 24, 2025.
[4]Christopher A. McNally, "The Rare Earth Bottleneck," China-US Focus, May 23, 2025 (citing Reuters).
[5]Silverado Policy Accelerator, "China's Global Exports of Rare Earth Elements and Rare Earth Permanent Magnets," March 23, 2026.
[6]Andersen Institute for Finance and Economics, "China's Export Control Architecture and Its Use of Critical Minerals as Strategic Pressure Points," April 29, 2026.
[7]Geopolitechs, "Beijing Tightens Critical Mineral Export Controls with a Chinese-Style Whistleblower Program," June 24, 2026.
[8]Geopolitechs, "Beijing Tightens Critical Mineral Export Controls with a Chinese-Style Whistleblower Program," June 24, 2026.
