According to an announcement issued by the U.S. Department of Commerce on October 8, 2025, 15 China entities have been included in the list of export control entities. The reason given by the United States is that these companies "assist Iranian-backed armed groups in obtaining U.S. drone electronic components."

Less than 48 hours later, on October 9th, the Ministry of Commerce of China issued an announcement in accordance with the Export Control Law of the People's Republic of China, clearly implementing export controls on rare earth mining, smelting and separation, magnetic material manufacturing and other related technologies and items, and they are not allowed to export without permission.

This interaction around corporate sanctions and resource control quickly attracted the attention of the global industrial chain.

us sanctions

Judging from the list of 15 sanctioned Chinese companies announced by the United States, the types of companies are not concentrated. There are small and medium-sized electronic component traders, parts suppliers, and some logistics-related companies. They do not master core military technologies in traditional cognition. main body.

U.S. Secretary of Commerce Lutnick mentioned in a follow-up interpretation that the basis for sanctions is divided into two categories: one is to "assist the Houthi armed forces in Yemen in purchasing drone components", and the other is "the Israeli military claims that the drone U.S.-made electronic components were found in the wreckage, and it was determined that Chinese companies were involved in the procurement."

But these two categories of grounds are clearly controversial, first, Israel's so-called "residual component trace report" has never been disclosed to the outside, nor has it been verified by third-party authoritative agencies, and the United States has only unilaterally determined to initiate sanctions, which raises questions about its rationality in the field of international economic and trade.

Second, the relevant Chinese enterprises issued a statement in the first time after the announcement of the sanctions, stressing that "always strictly abide by domestic and foreign export regulations, have actively communicated with relevant U.S. authorities", but as of a week after the announcement, the U.S. still did not receive substantial response.

China's Ministry of Commerce spokesman Hu Qing said at a routine news conference on October 10 that the "unilateral sanctions supported by lack of evidence" by the US are essentially a continuation of its logic of interfering with the normal operation of Chinese enterprises and curbing the development of China's related industries through "list suppression."

China countermeasures

In the face of US sanctions, China's choice of rare earth-related technologies and items as the entry point for counter-measures is not a temporary decision, but based on the strategic value of the rare earth industry and China's industrial advantages.

Many people's understanding of rare earths remains at the level of "rare metals", but ignore their "irreplaceability" in high-end manufacturing and defense industries. This is also the core reason why China chose this field.

From the application scenario, rare earth magnets are the "heart" of many key equipment, the report released by the Chinese rare earth industry association in the first half of 2025 showed that the U.S. F-35 fighter aircraft's engines need titanium titanium magnets to ensure power stability, "the predator" drone's navigation system relies on titanium magnets to accurate positioning, and even nuclear submarine sounding equipment can not be separated from titanium, titanium and other rare earth elements.

Even in the civilian field, if the electric vehicle motors of Tesla and other car companies lack terbium, the manufacturing cost of a single unit will increase by 300-500 US dollars, which is unbearable for car companies with an annual output of millions of vehicles. cost pressure.

More importantly, China has formed a complete closed-loop advantage in the rare earth industry chain "from mines to magnetic materials."

According to data from the China Rare Earth Industry Association, China accounts for more than 90% of the global rare earth refining capacity, which means that even if other countries have rare earth mineral resources, they still need to rely on China's smelting and separation technology to convert ore into usable industrial raw materials.

The Global Rare Earth Resources Report released by the U.S. Bureau of Geological Investigation in 2025 also acknowledged that the U.S. indigenous rare earth reserves account for about 21% of the world, but due to the lack of mature metallurgy separation technology, the mining of rare earth minerals still need to be transported to China for refining and processing, this "mining difficulty" difficulty, so that rare earth becomes the "precision grasp" of China's counteraction.

China's control measures

The regulatory announcement released by the Chinese Ministry of Commerce, both in scope and implementation details, reflects "precision", avoiding vulnerabilities that may exist in previous parts of the regulatory measures.

The scope of control not only includes rare earth mining and metallurgy separation technology, but also covers the core process of magnetic materials manufacturing, and even the assembly, commissioning and maintenance technology of the production line is included in the control, which means that the U.S. side even wants to bypass control through the "introduction of equipment indirectly obtaining technology".

What deserves more attention is the "traceability clause" in the announcement: even if the exported goods are uncontrolled, if the exporter knows that the goods will be used for overseas rare earth-related production activities, it still needs to apply for a license from the Ministry of Commerce.

This clause directly blocked the possibility of "grey exports", before there had been a few enterprises trying to export uncontrolled rare earth processing equipment, auxiliary materials, and export rare earth production technology, and the clarification of this clause, so that such operations lost space.

In terms of the review criteria for licensing applications, the announcement also clearly defines: overseas military users, importers or end users who have been included in the export control list or list of concern, their licensing applications will not be approved in principle;

Rare-Earth-related objects or technologies that may be used for the design, development, production of weapons of mass destruction and their carriers, or for terrorist purposes, or for the enhancement of military potential, shall also, in principle, not be authorised.

At the same time, the announcement also retains the "humanitarian immunity", used for emergency medical, emergency events, natural disaster rescue of rare-earth related objects, without the need to apply for permission, but must be submitted to the Ministry of Commerce within 10 working days after export, this design both guarantees the control effect, but also reflects humanitarian considerations.

US response

After the announcement of China's control measures, the US media that the U.S. is considering joining the G7 countries to set a "rare-earth price lower limit", trying to raise the cost of China's rare-earth exports through collective procurement, thereby forcing China to relax controls.

But from the perspective of industrial reality, this plan faces obvious shortcomings. First of all, price is not the core contradiction of the U.S. rare earth supply chain. Experts from the China Rare Earth Industry Association said in an interview that the core appeal of American companies is to "obtain a stable supply of refined rare earths" rather than simply lowering prices.

Even if the G7 countries collectively raise the purchase price, if China does not provide refined products, other countries can not meet the needs of the United States, globally, except for China, currently no country can scale separation of rare-earth metallurgy, low-cost production, Japan, France, although there is a small amount of refined production capacity, but can only meet the domestic demand of 10%-15%, and the technology originates from China.

Second, the difficulty of the U.S. self-building rare earth industrial chain far exceeds the expectation, according to the industry analysis agency estimates, if the U.S. will rare earth refining self-sufficiency, it will need to invest at least $ 5 billion in the construction of metallurgy separation plants, and from the construction of the plant to the production will take 3-5 years, during which time it will also need to solve the problem of environmental protection technology, the shortage of professional personnel.

More importantly, the wastewater and waste gas treatment technology produced in the process of rare earth smelting and separation is currently mainly in the hands of Chinese companies, and it is difficult for the United States to break through this technical barrier in the short term.

The director of the Institute of International Market Studies of the Ministry of Commerce of China said in an interview with CTV Finance that if the United States wants to get rid of its dependence on China's rare earth, "it is not only the problem of building several factories, but the need to rebuild the entire industrial chain ecology, which is almost impossible to realize in 5-10 years."

From the U.S. sanctions on China on October 8, to China's introduction of rare earth control measures on October 9, this 48-hour interaction is essentially a strategic game for China and the United States in key areas of the global industrial chain.

However, unlike the US unilateral sanctions, China's measures are always based on the Export Control Law of the People's Republic of China, with open and transparent procedures and clear goals to "safeguard national security and industrial interests."

The relevant person in charge of China Rare Earth Industry Association stressed that China has never actively sought "resource hegemony", and this control is a legitimate response to the unilateral sanctions imposed by the United States.

With the acceleration of the global industrial chain restructuring, the interaction in the rare-earth field may only be a beginning.How to interest balance under international rules and how to avoid the impact of the industrial chain "disconnection" on the global economy will be the issues facing both China and the United States and the world.

For ordinary consumers and enterprises, the most direct impact of this game may be reflected in the price and supply stability of high-end equipment, new energy vehicles and other products in the future.

Edited by: W

Source of information: