This week Beijing moved to tighten controls on exports of rare earths and processing technologies, expanding licensing requirements that analysts say touch key inputs for chips, EV motors and defense components CNN analysis.
Context: China accounts for roughly 70% of global rare‑earth production and an even larger share of refining capacity, giving it outsized leverage over complex supply chains. Beijing’s rules extend to products that contain tiny percentages of China‑sourced rare earths or that are processed with Chinese technology.
Why it matters: manufacturers and chipmakers face both direct shortages and second‑order effects — higher input costs, longer lead times, and accelerated efforts to onshore or diversify supplies. The measures could slow deployment of AI hardware and EV production timelines if licensing bottlenecks persist.
Policy angle: Beijing says licenses will be granted for compliant uses, but enforcement, interpretation and the timeline matter — and Washington has signalled a mix of tariffs and export controls in response. Companies should expect a period of jagged supply‑chain adjustments rather than an immediate embargo or halt.
