America’s advanced weapons manufacturers are facing a looming shortage of critical rare-earth minerals, largely due to new export licensing restrictions imposed by China. The move, a response to rising trade tensions under former President Donald Trump’s administration, threatens to disrupt supply chains essential to the U.S. defense and aerospace sectors.

According to the Center for Strategic and International Studies (CSIS), the restrictions target seven key rare earths—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—used in the production of high-tech military equipment such as fighter jets, submarines, drones, and smart munitions.

The warning was echoed by UK think tank Chatham House, which noted that further Chinese tightening could significantly damage the U.S. defense sector and hinder broader industrial revitalization efforts. “Ultimately, this could give Beijing a crucial strategic advantage in the long-term U.S.-China competition for military and technological supremacy,” Chatham House said.

Though China hasn’t enacted a full export ban, its new licensing regime is reminiscent of its 2012 dispute with Japan, when similar restrictions triggered a tenfold spike in rare-earth prices.

Rare earths are vital for various industries, particularly for manufacturing high-strength magnets used in electric motors and precision weaponry. China currently produces 70% of the world’s rare earths and processes 90% of global supply, a dominance that developed in part because other nations were unwilling to bear the environmental costs of production. The U.S. currently has no domestic rare-earth production.

In response, the U.S. has attempted to secure alternative sources—including from Ukraine and Greenland—leading to some of the Trump administration’s more controversial foreign policy moves, such as exploring deals involving Greenland and suggesting rare earths could be leveraged in negotiations around the war in Ukraine.

The minerals in question are integral to critical defense systems, including F-35 fighter jets, Virginia- and Columbia-class submarines, Tomahawk missiles, radar platforms, Predator drones, and precision-guided munitions.

CSIS noted that China’s actions should not come as a surprise, citing earlier precedents. “China first used rare earths as a geopolitical tool in 2010 during a dispute with Japan,” CSIS commented. “Between 2023 and 2025, it began restricting exports of strategic materials to the U.S., including gallium, germanium, antimony, graphite, and tungsten.”

William Matthews, a research fellow with Chatham House’s Asia-Pacific program, highlighted China’s strategic position: “Beijing now holds a powerful grip over upstream supply chains essential to U.S. technological and military dominance. While the U.S. seeks to restrict China’s access to advanced semiconductors, China is signaling its own ability to choke off critical material inputs further up the supply chain.”

He also warned of long-term implications, particularly as both nations race to develop sixth-generation fighter jets, including the U.S. F-47 recently unveiled by Trump. Any Chinese edge in materials could tip the balance in this next-generation arms race.

Concerns over rare-earth vulnerabilities extend beyond defense. Companies like Tesla have moved to reduce their reliance on these minerals, with the electric carmaker cutting rare-earth use in its vehicles by 25% in recent years.

“This isn’t a new issue,” said Patrick Schröder, a global trade and environmental researcher at Chatham House. “It’s been known for over a decade. Most high-tech industries can’t function without rare earths. Other countries were content to let China handle the environmental fallout—until now. Once geopolitics enter the picture, the entire equation changes.”

Source: theguardian