China's 2026 Rare-Earth Export Controls: A U.S. Importer's Guide
China's 2026 export controls run in two layers: a seven-element rare-earth license enforced today, and an extraterritorial "50% rule" paused into late November 2026. What U.S. importers of magnets, EVs, electronics, and auto parts need to do now.
If you import auto parts, EV components, electronics, magnets, or defense-adjacent goods that contain Chinese rare earths, China's export-control regime now reaches into your supply chain — on the export side, before your goods ever hit a U.S. port. This guide explains what is controlled right now, what is paused until late 2026, and what U.S. importers should do about it.
The short version: China's 2026 controls operate in two layers. The April 2025 regime (MOFCOM Announcement 18) is fully enforced today — it requires a Chinese export license, granted per shipment, for seven medium and heavy rare earths: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, plus their derivatives and the magnets made from them. A second, broader October 2025 escalation — including the extraterritorial "50% rule" that would have reached goods made outside China — was suspended for one year, into late November 2026, as part of the Xi–Trump trade truce. Importers need a licensed supplier, a map of their Chinese-origin inputs, and a plan for what happens if the suspension lapses.
The two layers at a glance
China did not pass one rule. It built a stack of measures across 2024–2025, then paused the most aggressive layer. Knowing which layer is which tells you what actually constrains your supply chain today.
| Measure | What it does | Status (June 2026) |
|---|---|---|
| Announcement 46 (2024), Art. 1 | Bans dual-use exports to U.S. military end-users / military end-use | Enforced |
| Announcement 18 (April 2025) | License required for 7 rare earths (Sm, Gd, Tb, Dy, Lu, Sc, Y) + derivatives + magnets | Enforced |
| 2026 Licensing Catalogue (Jan 1, 2026) | Formalized the rare-earth compound licensing in the import-export catalogue; added silver and other items | Enforced |
| October 2025 escalation (Announcement 61 et al.) | +5 more elements, magnet/lithium-battery inputs, and the extraterritorial "50% rule" reaching foreign-made goods | Suspended to ~Nov 2026 |
| Gallium / germanium / antimony controls (Announcement 72 pause) | Standard licensing restored during the truce | Paused to ~Nov 2026 |
The takeaway: the layer that bites today is the April 2025 seven-element license. The layer that would have been hardest for U.S. manufacturers — extraterritorial reach over products assembled outside China — is the one currently on hold.
What is controlled right now (the April 2025 regime)
MOFCOM Announcement 18 of 2025 is the operative rule for most importers. It places seven medium and heavy rare earths under export licensing:
- Samarium (Sm) — used in SmCo permanent magnets for high-temperature motors and defense systems
- Gadolinium (Gd) — MRI contrast, control rods, magnetostrictive alloys
- Terbium (Tb) — additive that lets NdFeB magnets survive heat in EV traction motors
- Dysprosium (Dy) — the other key NdFeB heat-resistance additive
- Lutetium (Lu) — catalysts, specialty electronics, medical imaging
- Scandium (Sc) — aluminum-scandium alloys (aerospace, sporting goods)
- Yttrium (Y) — phosphors, lasers, high-temperature superconductors
The control covers not just the raw elements but their oxides, compounds, alloys, and the finished magnets — which is what pulls ordinary manufactured goods into scope. A Chinese supplier shipping NdFeB magnets containing dysprosium or terbium must hold a valid MOFCOM export license and apply per shipment.
Two practical consequences for U.S. importers:
- Your goods can be delayed at the Chinese border, not the U.S. one. If your supplier's license application is slow or denied, the shipment doesn't leave China. Customs data shows exports of yttrium, dysprosium, and terbium running roughly 50% below pre-restriction baselines — the licensing friction is real, not theoretical.
- The military end-use ban (Announcement 46) still applies. Dual-use items destined for U.S. military end-users are categorically prohibited, regardless of licensing. If any part of your downstream sells into defense, document your end-use carefully.
What is suspended until late 2026 (the "50% rule")
In October 2025 China announced a sharp escalation: five additional rare-earth elements, controls on magnet and lithium-battery inputs, and — most consequential — an extraterritorial licensing obligation. Often shorthanded as the "50% rule," it would have required a Chinese export license for certain goods manufactured outside China when they incorporate Chinese-origin controlled rare earths above a threshold, or are produced using Chinese rare-earth extraction, separation, or magnet-making technology.
That extraterritorial reach is the part that alarmed global manufacturers: a magnet made in Germany or a motor assembled in Mexico could, in principle, have needed Beijing's sign-off to ship.
It is currently suspended. Following the November 2025 Xi–Trump meeting, China issued MOFCOM Announcements 70 and 72, pausing the October directives — including the extraterritorial obligation — for one year, into late November 2026. In exchange, the U.S. agreed to delay its EAR "Affiliates Rule" (the measure that would have extended U.S. Entity List controls to foreign subsidiaries that are 50%+ owned by listed parties).
The suspension is a truce, not a repeal. If it lapses in November 2026, the extraterritorial regime snaps back — which is why supply-chain mapping done now is insurance, not wasted effort.
Why this matters by industry
Auto parts & EVs
Traction motors depend on NdFeB magnets fortified with dysprosium and terbium — both on the enforced list. If you import motors, e-axles, or finished assemblies, your exposure runs through your supplier's MOFCOM license. For the import-duty side of the same parts (Section 232 derivatives, USMCA, 8708 classification), see our HS 8708 auto-parts tariff guide.
Electronics
Phosphors (yttrium), specialty capacitors, and lasers touch the controlled elements. Pair this with the electronics import tariff guide for the U.S.-side duty picture.
Magnets, motors & clean energy
Wind turbines, industrial servo motors, and HVAC compressors all rely on heat-stable NdFeB magnets — the single most license-exposed category.
Defense-adjacent goods
Samarium-cobalt magnets and several controlled elements are defense-critical, and the Announcement 46 military end-use ban sits on top of the licensing layer.
How China's export controls interact with U.S. import tariffs
This is the part most coverage misses, and where it matters for landed cost. China's licensing is an export-side control; U.S. tariffs are an import-side control. They stack independently:
- A part can clear its Chinese export license and still owe U.S. Section 301, Section 232, and any reciprocal duties on entry.
- A material tight enough to draw a Chinese license is often the same material U.S. agencies scrutinize for Section 232 derivative scope — so expect attention on both ends.
- Diversifying away from Chinese rare earths doesn't just de-risk licensing; depending on origin it can change your U.S. duty stack too.
Model the U.S. side with our duty calculator and compare alternative origins in the sourcing comparison tool. For the broader picture of moving supply out of China, see supply-chain diversification beyond China.
What U.S. importers should do now
- Confirm your supplier holds a valid MOFCOM export license for any of the seven controlled elements (or magnets/derivatives containing them) — in writing, with the license reference.
- Map your Chinese-origin inputs. Identify every component containing controlled rare earths and trace its origin and processing. This is the exact work the extraterritorial rule would require if the suspension lapses — do it now while it's optional.
- Document product classifications and end-use. Keep clean records that your goods are not destined for prohibited military end-users.
- Consider applying for general licenses while the review environment is favorable. Law firms tracking the regime note the truce period is a comparatively easier window to secure approvals.
- Build a November 2026 contingency. Know which of your SKUs would fall under the extraterritorial rule if it returns, and pre-qualify a non-Chinese alternative for the highest-risk ones.
Bottom line
China's 2026 rare-earth controls are not a single event but a layered regime. The April 2025 seven-element license is live and constraining shipments today; the October 2025 extraterritorial "50% rule" is paused into late November 2026. For U.S. importers of magnets, motors, EVs, electronics, and auto parts, the move is the same either way: get a licensed supplier, map your Chinese-origin inputs, and have a plan for the day the truce ends. The companies that treat the suspension window as preparation time — not a reprieve — are the ones who keep their lines running if the controls snap back.