The Tamesis
Beijing is tightening restrictions on some major U.S. rare earth exports, a move some experts told Reuters this week was a “weaponization” of its dominance of the industry.
These restrictions have created critical shortages of two rare earths, yttrium and scandium, which play small but vital roles in defense technology, aerospace and semiconductors.
The price of yttrium, a rare earth used in coatings that prevent engines and turbines from melting at high temperatures, has risen 60% since November and is now about 69 times more expensive than last year. The report stated.
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If these yttrium coatings are not used regularly, the engine will become unusable.
Meanwhile, exports of yttrium products to the United States have fallen to just 17 tonnes in the eight months since Beijing first imposed new rare earth export controls last April. Reuters pointed out that in comparison, in the months before these restrictions, the company exported 333 tons of yttrium products to the United States.
These limitations remain despite the The agreement reached between Beijing and the United States late last year This follows a high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping.
In the days since, Washington has also significantly eased restrictions on the flow of U.S. technology to China, becoming a key flashpoint in relations between the world’s two largest economies.
Still, rare earth exports will remain a key issue when Trump takes office. Arrive in Beijing In March, eight years after his first presidential visit to China.
Game-changing leverage
Although Beijing has allowed many rare earth exports to resume since Xi Jinping and Trump met in Seoul in October, it still tightly controls the elements vital to key strategic sectors.
For example, a shortage of yttrium has disrupted the U.S. aerospace supply chain, directly impacting major airlines and defense companies.
Aerospace supply chain expert Kevin Michaels told Reuters that low yttrium supply had not yet affected engine production, but manufacturers were still concerned.
“This is a noteworthy project and a concrete example of how China is demonstrating its rare earths prowess,” said Michaels, managing director of U.S. consultancy Aerodynamics Consulting.
93% of the yttrium in the United States is directly supplied by China. The remaining 7% is made from materials that are first processed in China, according to the U.S. Geological Survey.
This complete dominance means that under current restrictions, engine manufacturers are already struggling to meet airline demand for spare parts and higher output from aircraft manufacturers Boeing and Airbus.
Reuters also stated that some North American companies in the yttrium coating supply chain have either run out of materials or temporarily halted production.
5G chips are also at risk
Besides yttrium, another rare earth in short supply is scandium, and China has near-monopoly control over its production.
“The U.S. currently has zero domestic production of scandium, and there are no alternative sources available outside of China,” Dylan Patel, founder and chief executive of research firm SemiAnalysis, told Reuters.
The resulting shortage of scandium “puts the production of next-generation 5G chips at risk,” he added. Although scandium is used in small amounts, it remains an irreplaceable element in advanced chip processing and packaging.
Patel said major U.S. semiconductor manufacturers rely on scandium to make chip components “which are used in nearly all 5G smartphones and base stations.”
Chipmakers facing scandium shortages have obtained scandium from third-country suppliers, a U.S. official told Reuters. But China requires license applicants to declare their end users, meaning China can approve any entity that plans to eventually sell products to U.S. companies.
“Our argument is that the semiconductor industry is being targeted,” the official said.
Chinese exporters are also in the dark
It’s worth noting that it’s not just North American companies that remain uncertain about the operation and future course of China’s export controls on critical rare earths.
Nearly a year since they came into effect, exporters are still asking a fundamental question: When will rare earths turn an everyday product into a controlled item?
Reuters reports Exporters of everything from pill boxes to billboards to auto parts remain confused about what is preventing their products from being exported to the United States.
While only 43 export control compliance inquiries were publicly released to the Chinese Ministry of Commerce between 2019 and 2024, that number jumped to 135 in 2025 alone. Reuters noted that the actual number is likely to be much higher if inquiries that may have been made through private channels are taken into account.
Meanwhile, despite Beijing’s expansion of its export enforcement staff, responses to inquiries from Chinese exporters remain vague and formulaic, the report said. These responses generally do not clarify whether any individual product, whether rare earths or magnets made from rare earths, requires a license.
“This is not just a supply chain shortage. This is economic warfare,” Nick Myers, chief executive of U.S. rare earths startup Phoenix Tailings, told Reuters.
“Weaponizing choke points”
Despite the growing shortage of rare earths, U.S. officials say the Trump administration is working to ensure that all U.S. companies have access to rare earths.
“This includes negotiating with China, monitoring compliance with the agreement between President Trump and President Xi, and developing necessary alternative supply chains,” a White House official told Reuters.
But experts say China is quickly gaining the upper hand in such negotiations.
Alfredo Montufar-Helu, managing director of Ankura Consulting in Beijing, told Reuters: “What we are seeing in China is… the rapid establishment of a comprehensive export control agency aimed at weaponizing bottlenecks in strategic and non-strategic sectors.”
“The United States is tightening some controls, a direct acknowledgment of China’s growing influence.”
- Vishakha Saxena and Institutions
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