Are China’s Rare Earths Really a Potent Weapon? by Daniel Gros
The available evidence indicates that Chinese rare-earth export restrictions would cost the West far less than often feared, though this cost is impossible to estimate precisely in advance. This is forcing prudence on both sides, to the disappointment of geopolitical hawks and the benefit of the global economy.
MILAN—Early last year, China’s government introduced an export-licensing regime requiring exporters to obtain approval before shipping heavy rare-earth elements and permanent magnets, over which China has a near-monopoly, to foreign firms. China relaxed these export restrictions later in the year, after US President Donald Trump agreed to reduce tariffs and export restrictions. For many observers, the message seemed clear: China’s rare-earths dominance amounts to a powerful source of geopolitical leverage, and the United States and Europe must do everything in their power to erode it.
