China dramatically expanded its rare earths export controls on Thursday, adding five new elements and extra scrutiny for semiconductor users as Beijing tightens control over the sector ahead of talks between Presidents Donald Trump and Xi Jinping.
The world’s largest rare earths producer also added dozens of pieces of refining technology to its control list and announced rules that will require compliance from foreign rare earth producers who use Chinese materials.
The Ministry of Commerce’s announcements follow U.S. lawmakers’ call on Tuesday for broader bans on the export of chipmaking equipment to China.
They expand controls Beijing announced in April that caused shortages around the world, before a series of deals with Europe and the U.S. eased the supply crunch.
“The White House and relevant agencies are closely assessing any impact from the new rules, which were announced without any notice and imposed in an apparent effort to exert control over the entire world’s technology supply chains,” a White House official told Reuters on Thursday.
The new curbs come ahead of a scheduled face-to-face meeting between Trump and Xi in South Korea at the end of October.
“This helps with increasing leverage for Beijing ahead of the anticipated Trump-Xi summit in (South) Korea later this month,” said Tim Zhang, founder of Singapore-based Edge Research.
China produces over 90% of the world’s processed rare earths and rare earth magnets. The 17 rare earths are vital materials in products ranging from electric vehicles to aircraft engines and military radars.
Exports of 12 of them are now restricted after the ministry added five – holmium, erbium, thulium, europium and ytterbium – along with related materials.
Foreign companies producing some of the rare earths and related magnets on the list will now also need a Chinese export licence if the final product contains or is made with Chinese equipment or material. This applies even if the transaction includes no Chinese companies.
