EU Chamber Warns China May Expand Rare-Earth Export Controls, Citing Ongoing Disruptions

The EU Chamber of Commerce in China has warned that Beijing may broaden its export controls on rare-earth elements, as European companies continue to face significant disruptions from the existing licensing system.

This situation is critical due to Europe's heavy reliance on China, which supplies approximately 98% of its magnets, essential for key industries like electric vehicles and wind turbines.

The warning comes amid rising geopolitical tensions, with the EU pursuing a 'de-risking' strategy and a temporary suspension of China's harshest controls set to expire in late 2026, raising the stakes for European supply chains.

The European Union's business community in China is sounding the alarm over the continued risk of disruption from Beijing's control over rare-earth elements.

The core of the issue is that even with a temporary 'truce' on some of China's most stringent export controls, European companies are still struggling with unpredictable licensing delays and the constant threat that the rules could tighten again at any moment. This warning from the EU Chamber of Commerce reframes the narrative: the situation has not been resolved, and the risk is growing.

This problem didn't appear overnight; it's the result of a clear sequence of events. First, the foundation was laid in late 2023 and April 2025, when China first restricted the export of rare-earth processing technology and then imposed a licensing system on seven key rare earths and magnets. This created the initial bottleneck that companies are still grappling with today.

Second, the situation intensified in October 2025 when Beijing expanded these controls, adding extraterritorial clauses that applied to the end-use of these materials in advanced semiconductors. This demonstrated China's willingness to use its market power as a geopolitical lever.

Third, a partial suspension of the October measures was announced in November 2025. While welcomed as a de-escalation, this truce was always temporary and is set to expire in late 2026. The underlying licensing requirements from April 2025 were never removed.

This brings us to today. The EU's strategy of de-risking—reducing its dependency on single sources like China—is running up against the hard reality of its supply chains. Europe depends on China for about 98% of its permanent magnets, which are vital for electric vehicles, wind turbines, and energy storage. The European Central Bank has found that over 80% of large European firms are closely linked to a Chinese rare-earth producer, meaning any disruption can quickly ripple through the entire economy.

The Chamber's warning is a reminder that the late 2026 deadline is a major inflection point. With rising trade tensions and both sides preparing defensive economic tools, the possibility of China re-activating or expanding its controls is a significant risk for Europe's industrial and green transition goals.

Rare-Earth Elements (REEs): A group of 17 metallic elements crucial for manufacturing high-tech products, including electronics, renewable energy systems, and defense equipment.
De-risking: A strategy aimed at reducing economic dependency on a single country or region to mitigate supply chain vulnerabilities and geopolitical risks, without completely decoupling.
Extraterritoriality: The application of a country's laws beyond its own borders. In this case, China's export controls apply to how its rare earths are used by foreign companies in other countries.

EU Chamber Warns China May Expand Rare-Earth Export Controls, Citing Ongoing Disruptions

This situation is critical due to Europe's heavy reliance on China, which supplies approximately 98% of its magnets, essential for key industries like electric vehicles and wind turbines.

The European Union's business community in China is sounding the alarm over the continued risk of disruption from Beijing's control over rare-earth elements.

Rare-Earth Elements (REEs): A group of 17 metallic elements crucial for manufacturing high-tech products, including electronics, renewable energy systems, and defense equipment.
De-risking: A strategy aimed at reducing economic dependency on a single country or region to mitigate supply chain vulnerabilities and geopolitical risks, without completely decoupling.
Extraterritoriality: The application of a country's laws beyond its own borders. In this case, China's export controls apply to how its rare earths are used by foreign companies in other countries.