Xi reignites tensions ahead of Trump meeting with dramatic curbs on critical rare-earths

By John Liu, CNN

(CNN) — Beijing ramped up sweeping restrictions on rare earth exports on Thursday, expanding the list of minerals under control and extending curbs to target their production technologies and their overseas use, including for military and semiconductor applications.

China dominates the global processing of rare earths – essential in everything from everyday electronics to fighter jets. The latest move came as Beijing broadened its leverage in trade talks with the United States and ahead of an expected meeting between Chinese leader Xi Jinping and President Donald Trump on the sidelines of the APEC summit in South Korea later this month.

Under the new rules, Beijing further asserts its dominance in the sector by adding five rare-earth elements, including holmium, erbium, thulium, europium, ytterbium, and related magnets and materials, to its existing control list, requiring export licenses. The announcement on Thursday brought the total number of restricted elements to 12, out of the 17 types of rare earths.

Licenses will also be required for the export of technologies used in rare earth mining, smelting and processing, as well as for magnets manufacturing. Foreign firms seeking to supply rare earths produced in China or processed with Chinese technologies will also need to obtain a license, according to the country’s Ministry of Commerce.

The restrictions aim to “safeguard national security and interests” by preventing the materials from “being used, directly or indirectly, in military and other sensitive fields,” the ministry said.

The commerce ministry will reject license applications for military use as well as defense companies and associated entities “in principle,” it said.

Export license applications involving the use of rare earths in the developing and making of advanced computing and memory chips, as well as artificial intelligence with potential military applications, will be reviewed on a case-by-case basis, the ministry said.

Moreover, Chinese nationals and companies are prohibited from assisting rare earth mining, processing and magnets manufacturing outside China without government approval.

In a move to protect China’s edge in the electric vehicle industry, the ministry on Thursday also announced curbs on lithium batteries and synthetic graphite anode materials, as well as equipment and technologies used to produce them.

The restrictions on new rare earth elements, as well as lithium batteries and related materials, will start on November 8. The extraterritorial rules will be effective on December 1. The rest of the restrictions went into effect immediately on Thursday.

China-US relations have shown tentative signs of improvement in recent months, though tensions remain. Last week, Washington expanded restrictions on certain Chinese tech companies to also cover their subsidiaries, drawing ire from Beijing.

In a separate announcement Thursday, the Chinese commerce ministry added 14 military, technology and security groups from the US and other countries to its unreliable entity list, barring them from operating in China, trading with Chinese companies or making new investments in the country.

Notably, the ministry added TechInsights, a Canadian technology research firm specializing in semiconductors, to the list. The company is known for revealing that some of Chinese tech giant Huawei’s AI processors contained chips made by Taiwanese chipmaker TSMC — in a possible violation of US export controls, which has been under investigation by American authorities.

CNN has reached out to TechInsights for comment.

Beijing has long criticized Washington for exercising “long arm jurisdictions” in US export controls, which prevented third-country companies like TSMC from supplying China with chips manufactured with American technology. But China’s move on Thursday signaled a shift in its strategy – adopting similar extraterritorial measures by extending its curbs on rare earths beyond borders.

Rare earths emerged as a key source of friction between the world’s two largest economies in April, when Beijing placed export controls on seven types of rare earth elements and their magnets in response to Trump’s “reciprocal tariffs” on Chinese goods. The move swiftly disrupted global supply chains, rattling industries from automobiles to defense.

Only in June did China and the US formalize a deal on rare earth shipments, slowly easing the shortages of the critical elements, though some industries are still grappling with the fallout.

In a Thursday statement, a commerce ministry spokesperson said the authorities have found that some foreign organizations and individuals had transferred or supplied Chinese rare earth items or technologies, with some materials being used in military or other sensitive fields.

“These actions have caused significant harm or potential threats to China’s national security and interests, undermined international peace and stability, and hindered global non-proliferation efforts,” the spokesperson said.

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