China's Rare Earth Export Restrictions Heighten Risk for Germany's Auto and Defense Industries

China has tightened export controls on rare earth minerals, a move that follows EU sanctions on Russia. The restrictions affect the supply of a group of 17 critical elements used in smartphones, LEDs, electric motors and wind turbines. German analyst Antonia Hmaidi of the Mercator Institute for China Studies warns that Germany is more dependent on these imports than many other nations, and that automotive and machinery producers could face production losses if supplies dwindle.

The same export curbs also impact the European defence sector. Rheinmetall AG, a major weapons manufacturer, reports increased uncertainty for dual‑use components such as rare earths, specialised electronics and optics. Companies are forced to seek alternative licences, source new suppliers and cope with longer lead times, raising the risk of supply‑chain disruptions for both civilian and military projects.