Threat to US and Allies’ Defense Industries: China Tightened Control Over Export of Rare Earth Metals

China has expanded restrictions on the export of rare earth metals and permanent magnets ahead of US President Donald Trump’s expected meeting with Chinese President Xi Jinping.

This was reported by the Center for Strategic and International Studies (CSIS).

The new regulation introduces the so-called ‘foreign direct product rule’ (FDPR), which allows for the control of foreign product sales if American technology, software, or equipment was used in their production.

The Ministry of Commerce of the People’s Republic of China in its Notice No. 61/2025 imposed the toughest restrictions on the export of such materials in history, which, according to analysts, puts additional pressure on the United States and its allies.

CSIS experts emphasize that these restrictions have serious consequences for the US defense and semiconductor industries. Rare earth metals are critical to the production of F-35 fighter jets, Virginia and Columbia class submarines, Tomahawk missiles, radar systems, Predator drones, and JDAM precision-guided bombs. China’s restrictions effectively prohibit the use of its materials in any military projects, which deepens the US strategic vulnerability amid China’s rapidly growing defense capabilities.

Despite this, the United States is taking steps to reduce its dependence on China. The only rare earth magnet manufacturing company in the United States, Noveon Magnetics, this week signed a memorandum of strategic partnership with Australia’s Lynas Rare Earths to develop its domestic supply chain. China still retains significant influence over global supply chains for rare earth metals, which remain critical to US national security and industrial production.

Earlier, Militarnyi reported that in September 2022, China had imposed restrictions on the export of minerals for the United States’ defense industry.