China tightens rare earth export rules before summit

As U.S. and Chinese leaders prepare to meet at the APEC summit in Gyeongju, South Korea later this month, China on Wednesday announced stricter rare earth export controls. The move appears aimed at signaling ahead of the summit, expected to address escalating trade tensions intensified by this year’s tit-for-tat measures. Analysts say global protectionism is rising after the European Union’s recent tariff hikes and China’s new export restrictions.

China’s Ministry of Commerce said its new “Decision on Implementing Export Control Measures for Rare Earth Materials” requires export approval for products made outside China that contain more than 0.1 percent Chinese rare earths, including permanent magnets. The rule also covers mining, refining, magnet production, and recycling technologies.

Beijing first introduced rare earth export restrictions in April in response to U.S. tariffs. The latest rules expand to cover indirect exports, signaling stricter enforcement. The measures are expected to affect the United States, Japan, and European countries working to diversify supply chains and reduce reliance on Chinese rare earths. The Financial Times described it as “the first instance of China extending export controls to rare earth materials used overseas.”

The Commerce Ministry said rare earth products have dual-use characteristics and that export controls are a “common international practice.” It added that some foreign entities had transferred controlled Chinese materials abroad, harming China’s national interests. The statement emphasized Beijing’s intent to prevent loopholes that allowed rare earth materials to be exported indirectly.

Since the start of the Trump administration, protectionist measures have continued to spread. On Oct. 7, the European Commission sharply cut annual duty-free quotas for imported steel to 18.3 million tons and doubled tariffs on excess imports to 50 percent, responding to Washington’s June decision to impose 50 percent tariffs on imported steel. On Oct. 6, the Trump administration announced plans to levy 25 percent tariffs on medium and heavy trucks starting Nov. 1, with similar measures under consideration for pharmaceuticals and semiconductors.


Chul-Jung Kim tnf@donga.com