China's Rare Earth Export Controls: Two Months In – Impacts, Responses, and What's Next

It has been two months since China's Ministry of Commerce (MOFCOM) and General Administration of Customs jointly issued Announcement No. 18 of 2025 on April 4th, regarding rare earth export controls. What have been the impacts so far? How might future policies evolve? What countermeasures have factories and buyers adopted? This article will provide the answers.

Which Countries and Companies Have Been Affected by China's Rare Earth Export Controls?

The export restrictions on seven types of rare earth elements detailed in the announcement have already significantly impacted production and trade in multiple countries. This includes considerable effects on the U.S. defense industry, Europe's automotive sector, and South Korea's electronics industry.

Among Fortune 500 companies, those affected include:

• Automotive: Tesla, Volkswagen, General Motors, Toyota, Hyundai

• New Energy: Siemens, Vestas, Caterpillar, ABB

• Consumer Electronics: Samsung, Apple, Philips

• Defense: Lockheed Martin, Raytheon

Why Are Rare Earth Magnets So Important?

High-performance rare earth permanent magnets are widely used in high-tech fields due to their unique physical properties (high magnetic energy product, high coercivity, high remanence, and thermal stability). Rare earths play a crucial role in enhancing the performance of these magnets.

What is China's Position in the Rare Earth Field？

Over the past 50 years, China has made enormous strides in rare earth technology. From mining and high-purity refining to final practical applications, China has achieved international commercial success. In all fields related to "rare earths," China holds a near-monopoly position. Approximately 90% of the world's rare earth magnets are produced in China.

Don't Other Countries Have Rare Earth Deposits Besides China?

According to estimates from the International Energy Agency (IEA), China accounts for 61% of global rare earth production and around 92% of rare earth refining.

The combined rare earth output of all other countries does not match China's. Currently, the United States has one rare earth mine, but the extracted rare earths require transportation to China for processing and refining. Australia possesses abundant rare earth resources, but its refining technology is about 20 years behind China's, offering no commercial advantage.

In the short term, no other country can supply significant quantities of rare earths ready for direct use in manufacturing.

How Should Companies Needing to Import Rare Earths Respond?

1. Apply to the Chinese government for an export license.

2. Seek alternative products.

How to Apply for a Chinese Magnet Export License?

License for China Import and Export of Dual-use Items and Technologies

The Chinese government stipulates that the Chinese exporter must be the applicant. They are required to submit documents such as sales contracts, agency agreements, product inspection reports, and a buyer's company commitment letter (detailing end-use and a non-resale pledge) to apply for a magnet export license. The typical review period is approximately 45 days. However, due to a significant increase in applications, this review period may be extended.

It is understood that Apple and Volkswagen have already successfully obtained magnet export licenses.

You can consult our specialist in export applications for assistance.

Finding Alternative Magnet Products

BMAG is currently developing high-performance magnets that do not contain rare earth elements. R&D is expected to be completed by July, with the magnets then entering the practical application phase. Key magnetic properties, such as magnetic flux, coercivity, and remanence, are anticipated to largely match those of rare earth magnets.

BMAG remains committed to R&D, constantly exploring new technologies, and is set to develop high-performance magnets with various formulations in the future.