China’s Rare Earth Export Curbs Disrupt Global Electronics and Defense Supply Chain

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China has effectively halted global exports of key rare earth elements (REEs) and magnets, including yttrium and dysprosium, following its April 4 announcement in retaliation to U.S. tariffs.
While the move targets the U.S., the absence of a licensing regime has disrupted shipments to all countries, impacting industries reliant on REEs like defense, aviation, and electronics.

Rare Earth Elements are a group of 17 chemically similar elements, including 15 lanthanides plus scandium and yttrium.
Despite their name, they are relatively abundant in the Earth’s crust but are rarely found in concentrated, economically exploitable forms.

Critical for Modern Technology
- REEs are essential in the manufacturing of high-tech devices like smartphones, electric vehicles, wind turbines, LED lights, and flat-screen TVs.
Defense and Aerospace Use
- They are used in precision-guided missiles, jet engines, radar systems, and other military equipment.
Green Energy Transition
- Vital for clean energy technologies such as solar panels, batteries, and permanent magnets in wind turbines and electric vehicles.
Strategic Importance
- Due to their wide applications and limited global suppliers (especially China’s dominance), REEs are considered strategically important for national security and economic stability.

Mining and refining are environmentally damaging.
Global supply is heavily concentrated, with China refining over 85% of REEs, creating vulnerability for other nations.

With China producing the majority of the world’s rare earth elements (REEs), the current export halt is expected to spark a global supply crunch, particularly impacting the U.S., Japan, Vietnam, and Germany.
While some Japanese firms are better prepared with over a year’s inventory, the disruption echoes China’s 2010 export ban during a territorial dispute.

Experts note that China has repeatedly used REE exports as a geopolitical tool — first in 2010 against Japan, and more recently from 2023 to 2025, restricting exports of key strategic materials like gallium, germanium, graphite, and tungsten to the U.S.

Countries are working to reduce reliance on China by developing domestic REE capabilities.
However, experts caution that breaking free will be difficult due to China’s dominance in refining technologies critical for processing rare earths.

India is expected to face minimal disruption from China’s REE export curbs due to its relatively low domestic consumption, despite a gradual rise in demand.

India imported 2,270 tonnes of rare earths in 2023–24, marking a 23% increase from 2019–20.
About 65% of these imports came from China and 10% from Hong Kong.

India’s domestic REE production is limited, led by state-run IREL Ltd, which operates a facility with an annual capacity of over 10,000 tonnes—significantly lower than China’s 2 lakh tonnes refined in 2023.

The Trump administration is drafting an executive order to stockpile rare earth metals from the Pacific seabed, aiming to reduce U.S. reliance on China for critical minerals, including battery materials.

China’s foreign ministry has objected to U.S. deep-sea mining initiatives, urging adherence to the UN Convention on the Law of the Sea and oversight by the International Seabed Authority.

In a parallel move, India launched an auction in November for seven seabed blocks in the Andaman Sea.
These blocks are rich in polymetallic nodules and crusts, which may contain valuable heavy rare earth elements.