Key facts
- China has imposed export controls on U.S. rare earth producers MP Materials and USA Rare Earth.
- The move is a response to the Pentagon's decision to add Chinese companies supporting the military to a roster.
- These restrictions prohibit the U.S. companies from accessing dual-use items originating in China.
- Eight other U.S. drone, robotics, and aerospace firms were also placed on China's export control list.
- MP Materials operates the sole major rare earths mine in the United States.
- The Group of Seven nations agreed to cap imports of rare earths from any single country below 60% by 2030.
China has imposed export controls on two U.S. rare earth producers, MP Materials and USA Rare Earth, in retaliation for the Pentagon's decision to add Chinese companies to a list of those supporting the military. The restrictions, effective immediately, prohibit these U.S. firms from accessing dual-use items originating in China and ban global entities from providing them with such goods.
This move marks an end to a period of restraint in China's use of export controls against U.S. companies, following a summit between U.S. President Donald Trump and Chinese leader Xi Jinping last October. The Commerce Ministry stated the decision was made to safeguard national security and interests. In addition to the rare earth producers, eight other U.S. companies, including drone and robotics firms, were also placed on China's export control list.
MP Materials operates the sole major rare earths mine in the U.S. and is a key component of efforts to build a domestic supply chain for critical minerals, having received a $400 million investment from the Department of Defense. USA Rare Earth, an emerging producer, recently secured $1.6 billion in funding from the U.S. Department of Commerce and is acquiring Brazilian mines. Both companies have been expanding their capacity amid U.S. efforts to boost domestic production following a trade standoff in 2025, when Beijing previously used rare earth supply restrictions as leverage.
Despite the symbolic nature of China's actions, their immediate impact may be limited, as both targeted companies reportedly have largely ceased sourcing equipment and materials from China. The announcement comes shortly after the Group of Seven nations agreed to cap imports of rare earths and permanent magnets from any single country outside their bloc to below 60% by 2030, aiming to reduce their collective reliance on China.
