China's rare‑earth export curbs threaten electric‑vehicle and tech supply chains

The International Energy Agency warns that new Chinese restrictions on rare‑earth exports could jeopardise up to €5.5 trillion of production outside China. The curbs would disrupt supply chains for electric‑vehicle motors, lithium‑ion batteries, solar panels, aerospace and defence equipment, with Europe and the United States bearing almost half of the projected economic impact. A possible additional limitation on graphite would threaten another €255 billion of output.

To lessen dependence on China, Europe and the United States have sharply increased public funding for critical‑mineral projects, committing about $65 billion between 2023 and 2025. New refining capacity in the United States and Malaysia is already reducing China's share of the global rare‑earth market from roughly 90 % in 2023 to an expected 85 % in 2025, potentially falling to 70 % by 2035 if announced projects are completed on schedule.

At the same time, analysts describe a “second Chinese shock” in which Beijing, after a real‑estate collapse that erased $10 trillion in household wealth, has ramped up high‑tech exports — including electric vehicles, batteries and solar equipment — to sustain millions of jobs. This aggressive export push is adding pressure to European manufacturers that are already struggling with supply‑chain bottlenecks.