New rules target chipmakers and global supply chains
China widened its grip on the global rare earths market on Thursday, announcing new export restrictions just weeks before a scheduled summit between Presidents Donald Trump and Xi Jinping. The expanded controls target five additional rare earth elements, dozens of refining technologies, and semiconductor users, including foreign firms relying on Chinese materials.
The Ministry of Commerce’s surprise move comes amid mounting trade tensions and mirrors similar curbs imposed by the U.S. on semiconductor-related exports. The U.S. government is now assessing the potential fallout from the decision, which threatens to disrupt global technology supply chains.
China sharpens leverage in global tech race
China, which processes over 90% of the world’s rare earths and magnets, added holmium, erbium, thulium, europium, and ytterbium to its restricted list. In total, 12 rare earth elements now face export curbs. These materials are critical for everything from EVs and jet engines to military radar systems.
New rules also state that foreign companies using Chinese equipment or materials in their products — even if no Chinese firms are directly involved — will now require an export license. Applications related to advanced semiconductor development, including 14nm or smaller chips and AI with military potential, will be reviewed case by case. Defense-sector users will be outright denied.
Markets react as rare earth bifurcation accelerates
The new controls are set to take effect in two waves: restrictions on the five added elements and equipment begin November 8, while the rules for foreign firms come into force December 1. The announcement sparked a rally in rare earth stocks across both Chinese and U.S. markets. China Northern Rare Earth Group and Shenghe Resources surged nearly 10%, while U.S.-based Critical Metals rose 17%.
Neha Mukherjee of Benchmark Mineral Intelligence noted this move signals a deeper “structural bifurcation” in the global tech economy, with China localizing its value chain while the U.S. and allies race to decouple.
Impact looms over chipmakers and global diplomacy
South Korea’s government is now reviewing the potential impact on its chip giants Samsung and SK Hynix. Taiwan’s TSMC, another major player, saw shares rise after reporting strong earnings, though it too faces regulatory uncertainty under the new Chinese rules.
As the 90-day trade truce nears expiration, the expanded restrictions may strengthen Beijing’s hand heading into the Trump-Xi meeting in South Korea later this month. Whether this move triggers further escalation or paves the way for negotiation remains to be seen.
