As the U.S. grapples with its own production challenges, new restrictions could disrupt international supply chains and threaten U.S. national security and economic competitiveness.

In Brief by Probe International

Based on an article by the Institute for Energy Research (IER), published on Oct. 23, 2025.

China has tightened its export controls on rare earth elements, requiring foreign entities to obtain licenses for products containing more than 0.1% domestically-sourced rare earths or made using Chinese technology, expanding restrictions from raw materials to include intellectual properties and technologies.

This move aims to prevent the misuse of these minerals in military applications and comes as China maintains a dominant position in the global rare earth supply chain, controlling over 69% of production and more than 90% of processing. The new regulations, effective Dec. 1, 2025, could disrupt international supply chains, particularly in the auto industry, and reflect ongoing trade tensions as the U.S. seeks to bolster its own rare earth production capabilities amid challenges in domestic mining and regulatory processes.

From 1940 to 1990, the U.S. was a leading producer of rare earth minerals at the Mountain Pass mine in California, but it lost this status to China due to lower production costs and environmental regulations. The mine closed in 2015 but resumed operations in 2018 under MP Materials after being acquired from the bankrupt Molycorp. Currently, it is the only U.S. facility producing rare earths, but its output is minimal compared to China’s.

However, challenges such as a lengthy permitting process and China’s dominance in the market complicate these efforts, threatening U.S. national security and economic competitiveness unless significant reforms are implemented.

To read this article in full, see the publisher’s website here.