China Tightens Export Controls on Key Rare Earth Elements — What Could the Impacts Be?
In early April, the United States imposed sweeping import tariffs on a wide range of foreign goods. The level of these tariffs varies depending on the trade deficit a given country maintains with the U.S. China, for example, faces a high tariff rate of 34 percent. The response from Beijing came swiftly: in addition to retaliatory tariffs, effective April 10, the Chinese government announced stricter export regulations on certain rare earth materials. From now on, the export of elements such as dysprosium, terbium, yttrium, gadolinium, samarium, lutetium, scandium, and their various compounds will require special government approval.
Why Are These Elements So Important?
Samarium is used in the form of samarium–cobalt (SaCo) magnets, which offer significantly greater heat resistance than the more common neodymium–iron–boron (NdFeB) magnets. This property makes them the preferred choice for high-performance environments such as military technologies, where components must endure high temperatures and extreme operating conditions.
Scandium is primarily used in aluminum alloys. When added to aluminum, it drastically increases the material’s strength while maintaining its lightweight characteristics—making it highly valuable for aerospace applications and military technologies such as drones. It also plays a role in some types of fuel cells.
Yttrium is essential in various advanced technologies. In medicine, it’s used in specialized laser treatments. It is also a key component in LED manufacturing and is widely employed in laser technology in general.
Gadolinium has become indispensable in medical imaging, particularly as a contrast agent in MRI scans. Thanks to its unique paramagnetic properties, there are currently few viable alternatives. Gadolinium is also used in nuclear reactors, where it serves as an effective neutron absorber.
Lutetium plays a central role in modern nuclear medicine, especially in positron emission tomography (PET), where it’s used in the form of lutetium orthosilicate. Beyond medical applications, it is also used in LED technologies.
Dysprosium and terbium have overlapping applications. Both are important in semiconductor and LED production. However, their most critical use is in the field of permanent magnets. Standard NdFeB magnets begin to lose their magnetism at around 80°C. When doped with terbium or dysprosium, however, these magnets can withstand much higher temperatures, making them suitable for high-performance applications such as electric motors and aerospace components.
What Are the Potential Consequences?
It’s important to note that this is not an outright export ban, but rather a regulatory tightening justified by China on national security grounds. Nonetheless, it grants Beijing the ability to withhold materials at its discretion. The full impact of this policy will only become evident in the coming months, once updated export data is available.
A precedent can be found in China’s 2023 export restrictions on gallium and germanium, which led to a near-complete halt in foreign shipments shortly after their introduction. Other raw materials subject to new tariffs have seen more modest disruptions.
Another key factor affecting the global rare earth supply is the evolving situation in Myanmar. The country supplies a significant amount of raw material for China’s rare earth industry, but exports have dropped sharply since mid-2024. Ongoing conflict between the military junta and rebel groups has directly impacted major mining areas, and it remains unclear whether any production is currently taking place. According to recent reports by Reuters, some materials from rebel-held regions may soon re-enter the market, though this is believed to involve existing stockpiles—exports that may also be subject to additional duties.
China’s imports of rare earth elements from neighboring Myanmar have declined in recent months.
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