China has announced new rules that give it tighter control over the flow of rare-earth metals and related technologies. Under the changes, companies must apply for export licenses if their products contain more than 0.1% Chinese rare earths or were made using Chinese mining, refining, magnet-making, or recycling technology. China also expanded the list of restricted elements and banned its citizens from participating in overseas rare-earth or magnet projects without permission.

Beijing's regulations target the critical points in the supply chain where China holds significant dominance: the refinement and processing of minerals into high-tech materials. For example, an American company that builds wind turbines would not need a Chinese export license just because its turbine contains magnets sourced from China. However, if it was producing its own magnets using Chinese materials or equipment the company would have to seek Beijing’s approval to export them.

The timing is no coincidence: President Donald Trump is slated to meet President Xi Jinping later this month on the sidelines of the Asia-Pacific Economic Co-operation summit in South Korea. Analysts say these restrictions strengthen China’s bargaining power going into those talks.

The implications for the United States are serious. Between 2020 and 2023, roughly 70% of America’s rare-earth imports came from China. China also dominates more than 85% of rare-earth refining globally. This concentration gives Beijing heavy leverage over supply chains critical to defense, electronics, and clean energy industries.