The rare earth quota system is a key tool used by China, the world’s top producer of the 17 minerals critical to EVs, wind turbines, defence systems and more, to manage global supply. Unlike in previous years, the quotas were delayed and communicated privately to state-owned companies last month, with firms reportedly instructed to keep the figures confidential for security reasons. This marks a further sign of China’s increasingly cautious and controlled approach amid ongoing trade tensions.
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China has become increasingly protective of its rare earth sector, especially as it leverages control over the supply chain during trade disputes with the U.S. and EU. In response to U.S. tariff hikes, Beijing recently added rare earth elements and related magnets to its export restriction list, a move that disrupted global supply chains and even forced some foreign automakers to scale back production.
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