China Tightens Rare Earth Export Controls Ahead of Trump-Xi Meeting

China has expanded its rare earth export restrictions, a move that could ripple across global supply chains, push up prices, and affect both traditional and crypto markets.

The Ministry of Commerce announced sweeping new rules on exports of rare earth materials, processing technologies, and derivative products used in semiconductors, AI systems, and defense. The regulations, effective Dec. 1, require foreign companies exporting products containing Chinese-origin rare earths or related technologies to obtain a dual-use license from MOFCOM.

This marks a significant escalation, as China dominates global rare earth production—essential for everything from consumer electronics to fighter jets. Analysts warn potential supply constraints could dent risk sentiment, particularly in AI and tech stocks, with knock-on effects likely spilling over into crypto markets.

“China just weaponized rare earths again, but this time globally,” said geopolitical strategist Velina Tchakarova on X. “Beijing now has effective veto power over key global chip, EV, and defense supply chains, including operations outside its borders. Licenses will be restricted for military or AI-related uses, notably 14nm chips, 256-layer memory, and military-grade AI systems.”

Tchakarova added that supply disruptions could impact EVs, turbines, and semiconductors, leading to price increases. The move also strengthens Beijing’s leverage ahead of an expected meeting between President Xi Jinping and President Donald Trump during the APEC summit in South Korea later this month.