China Tightens Grip on Rare Earth Exports Amid U.S. Tensions

China has enhanced its rare earth export controls by expanding restrictions on processing technology, specifically targeting defense and semiconductor industries overseas. The move, ahead of a Trump-Xi meeting, aligns with strategic geopolitical leverage, impacting global markets in rare earth technology and advanced semiconductors.

China has tightened its control over rare earth exports, specifically targeting defense and semiconductor sectors, a strategic move to bolster its geopolitical leverage. The Ministry of Commerce announced Thursday an expansion of restrictions on processing technology, crucial for meeting global demand.

The decision follows U.S. lawmakers' pleas to further ban chipmaking exports to China. Beijing's enhanced regulations, first introduced in April, previously led to worldwide shortages, resolved through agreements with European and U.S. counterparts. This move is seen as a crucial tactic ahead of a significant meeting between President Donald Trump and President Xi Jinping.

With over 90% global production share, China's focus remains on safeguarding its rare earth magnet production, essential for high-tech manufacturing. Analysts suggest the newly laid restrictions will maintain China's hold on vital resources, impacting overseas companies reliant on Chinese-produced rare earth materials, a scenario mimicking U.S. semiconductor export controls.

(With inputs from agencies.)