ChinaTalk EMERGENCY POD: China's Rare Earth Export Controls
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Oct 9, 2025 Chris McGuire, a former U.S. State Department official with a decade of expertise in China policy, discusses China's recent rare earth export controls ahead of the APEC summit. The conversation dives into the implications for semiconductor production, enforcement challenges, and strategic risks. They explore how these controls might accelerate global diversification in rare earth capabilities and whether China can withstand economic pain. McGuire also raises concerns about U.S. gaps in critical minerals policy and the complexities of negotiation dynamics with China.
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China's Broad New Rare Earth Controls
- China expanded rare earth export controls to include end-uses like semiconductors and a de minimis-style threshold.
- The rules have an extraterritorial reach and could affect global tech supply chains if enforced.
Magnets Affect Tools More Than Chips
- Rare earth magnets mostly appear in chip manufacturing tools rather than the chips themselves, so stockpiles and tooling usage matter.
- If China enforces controls, chip production might be resilient short-term but uncertainty remains for tool expansion and consumables.
Risk Lies Outside Semiconductors
- The bigger economic risk is disruption to broader manufacturing (autos, industrials) that rely on magnets and rare earths.
- The U.S. may hold escalation dominance in semiconductors but faces uncertainty across other industrial sectors.
