**China Tightens Export Controls on Rare Earth Elements** China has expanded its export restrictions on rare earth elements, adding five new materials to its control list. This move comes as Beijing seeks to tighten its grip on the sector ahead of upcoming talks between U.S. President Donald Trump and Chinese President Xi Jinping. The new regulations will also impose additional scrutiny on semiconductor users. The Ministry of Commerce announced that the new controls will require foreign rare earth producers to comply with licensing requirements if they use Chinese materials. This follows earlier restrictions introduced in April that had already caused global supply shortages. The five newly restricted elements are holmium, erbium, thulium, europium, and ytterbium. China is the world's largest producer of processed rare earths, accounting for over 90% of the global supply. These elements are essential for various technologies, including electric vehicles, military radars, and aircraft engines. The recent changes mean that exports of 12 rare earth elements are now restricted. A White House official stated, "The White House and relevant agencies are closely assessing any impact from the new rules, which were announced without any notice and imposed in an apparent effort to exert control over the entire world's technology supply chains." The new restrictions will take effect on November 8, just before a 90-day trade truce with the U.S. expires. Regulations affecting foreign companies that produce items using Chinese rare earth materials will begin on December 1. These rules will apply even if the transaction does not involve Chinese companies. Tim Zhang, founder of Edge Research, noted that these actions could enhance Beijing's leverage ahead of the anticipated Trump-Xi summit in South Korea later this month. The ministry also stated that licenses would not be granted to overseas defense users, and applications related to advanced semiconductors would be evaluated on a case-by-case basis. This includes chips with 14-nanometer technology or more advanced, as well as memory chips with 256 layers or more. Neha Mukherjee, a rare earths analyst, commented on the potential implications of these restrictions, saying, "We're likely entering a period of structural bifurcation — with China localizing its value chain and the U.S. and allies accelerating their own." In response to the new regulations, South Korea's industry ministry stated that it is assessing the details and will continue discussions with China to mitigate the impact on its major memory chipmakers, Samsung Electronics and SK Hynix. The European Commission expressed concern over China's announcement, emphasizing the need for stable access to critical raw materials. The EU and the U.S. are both working to increase their own production of rare earths to reduce reliance on China. China's dominance in the rare earth supply chain has significant geopolitical implications, as these materials are crucial for various industries, including defense and technology. The new export controls are expected to further complicate international trade relations and supply chains in the coming months.
China Tightens Export Controls on Rare Earth Elements

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