The exports halt is set to impact e-motor production, as well as other crucial US industries like defence and aerospace. By Stewart Burnett
In a move set to deeply affect non-Chinese automakers, China has halted exports on six rare earth metals. The move comes shortly after indications from the US that it is willing to come to the negotiating table in the ongoing trade war between the two countries.
The restricted exports include six rare earths: gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These are crucial for manufacturing e-motors, magnets, and are also used in high-performance applications like fighter jets and missiles. Their supply chain is also dominated by China, which produces about 90% of the global supply.
Both the US automotive and defence industries are highly exposed to the export freeze. The US’ sole rare earth mine, Mountain Pass, lacks the capacity to refine heavy rare earths, relying on China for processing. Between the years 2019-2022, three quarters of all US rare earth imports came from China.
Other countries, including Japan, Germany and South Korea, are also dependent on China. There are some signs that this is changing. Multiple projects to boost production capacity both from new mines and circular economy projects are currently underway in the US and Europe.
In an 11 April meeting with Spanish Prime Minister Pedro Sanchez, Chinese President Xi Jinping, urged unity in the face of US tariffs: “China and the EU must fulfill their international responsibilities, jointly safeguard the trend of economic globalisation and a fair international trade environment, and jointly resist unilateral and intimidating practices.” Later, he urged Vietnam to “strengthen cooperation in production and supply chains”.
Tesla Chief Executive Elon Musk, a close ally of President Trump and for whom multiple business endeavours rely on continued access to rare earth metals, argued the problem isn’t scarcity—it’s refinement capacity. “People understandably tend to think that rare earth mineral deposits are what’s scarce, given the name. That is false. They’re everywhere,” he posted on X. “What matters is the ability to refine rare earth elements (which are NOT actually meaningfully rare) and manufacture magnets for use in electric motors.”