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FLUKE
Kimball Electronics
Tolomatic
Industrial Scientific
AHEAD
roboception
By Abhishek Shetty | Mon Jun 16 2025 | 2 min read

Table of Contents

Rare Earth Elements (REE) and Rare Earth Minerals (REM) have quietly become the backbone of modern technology—and now, they’re at the center of a geopolitical chess game. In 2025, China’s tightening grip on REE exports has raised red flags across the globe, prompting urgent regulatory responses and supply chain overhauls.

Let's understand what China’s restrictions mean for manufacturers, what actions the EU and U.S. are taking, and how companies can adapt using tools like the EU Critical Raw Materials Act (EU CRM Act) and REE traceability frameworks.

What Are REEs and REMs?

REEs are 17 critical elements (lanthanides plus scandium and yttrium), while REMs refer more broadly to their naturally occurring mineral forms. These materials are essential for:

  • EV motors
  • Wind turbines
  • Smartphones
  • Military guidance systems
  • Semiconductors and sensors
What Are REEs and REMs..PNG

China’s 2025 Export Controls for REEs: What Changed?

In early 2025, China intensified its export licensing regime for REEs and rare earth magnets. Key changes include:

  • Stricter approvals for overseas shipments
  • Quotas on magnet-grade Neodymium, Dysprosium, and Terbium
  • Mandatory end-use disclosure for foreign buyers

This effectively gives China greater control over downstream applications of REMs—and positions REEs as a tool of foreign policy.

> “This is no longer about economics. It’s about leverage.” — U.S. Department of Commerce official, April 2025

India’s EV and electronics sectors have already reported production delays due to REE shipment blocks, calling for urgent policy interventions and domestic sourcing plans.

In Europe, the automotive supply chain is already facing plant shutdowns and halted production lines as inventories run dry. According to CLEPA (the European Association of Automotive Suppliers), only a quarter of the hundreds of export license applications submitted to China have been approved. Licensing inconsistencies, IP disclosure risks, and a lack of transparency are creating a fragile situation for combustion and electric vehicle production alike. CLEPA has publicly urged the EU and China to establish clearer and fairer trade terms to prevent long-term damage to Europe's industrial base.

Global Reaction for REE: Policy, Panic & Procurement

  • EU: Critical Raw Materials Act (EU CRM Act)

The EU CRM Act, now in force since May 2024, places REEs and REMs in the strategic raw materials list.

  • Targets 10% EU domestic extraction
  • 40% local processing and 25% recycling by 2030
  • Mandates risk mapping and reporting by companies in strategic sectors
  • U.S.: Defense-Driven Acceleration
  • Invoked the Defense Production Act to scale domestic REE supply
  • Commerce Department investigating REE import dependency (Q2 2025)
  • U.S.-Ukraine mineral deal signed to diversify REM sourcing
  • Canada & Allies
  • Launching public-private partnerships for rare earth mining
  • Streamlining permitting for domestic REM operations

Business Impact: Why You Can’t Ignore This

If you rely on REEs/REMs for production—even through Tier 2 or 3 suppliers—you are now:

  • Exposed to price volatility and delivery delays
  • Expected to declare REE origin and presence in product-level disclosures
  • At risk of non-compliance under EU, U.S., or ESG frameworks

Action Plan for Compliance Leaders

  1. Map REE Exposure Across Products
    • Identify critical components (magnets, capacitors, sensors)
  2. Collect REE Supplier Declarations
  3. Track Country of Origin
    • Focus on China-origin declarations and alternatives
  4. Align with the EU CRM Act
    • Build reporting mechanisms for risk, recycling, and substitution
  5. Monitor Regulatory Shifts
    • Set up watchlists for China’s MIIT announcements, U.S. DoD notices, and EU CRM updates

How Acquis Helps

Acquis offers a purpose-built REE Module with:

  • Supplier outreach workflows for REE presence & origin
  • Country-of-origin tracking and China-origin flagging
  • Support for digital traceability (FMD, PEC systems)
  • Pre-built dashboards for EU CRM Act, U.S. DoD, and ESG compliance

Reflections

China’s restrictions have redrawn the map on Rare Earth Elements compliance. What was once a niche sourcing question is now a strategic business risk.

If your compliance team isn't tracking REEs yet—start now.

> Rare Earth Elements (REE) and Rare Earth Minerals (REM) are more than just materials. In 2025, they're a measure of sovereignty, security, and sustainability.

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China's Rare Earth Elements Restrictions: What It Means for REE Supply Chains

On April 4, 2025, China issued Announcement No. 18, enforcing strict export controls on seven medium‑ and heavy rare-earths including dysprosium, terbium, samarium, and gadolinium as well as related magnets and alloys. Exporters must now obtain MOFCOM licenses (individual or general), and exporters must also provide detailed end‑use and technical documentation.
The controlled substances include samarium (used in sensors and automotive parts), gadolinium (MRI and reactor control), terbium (laser processing, anti‑counterfeiting), dysprosium (EVs, wind turbines), lutetium, scandium, and others. These are vital for clean energy, aerospace, defense, and semiconductor sectors.
China frames the move as a national security measure, citing dual‑use and defense applications, along with environmental conservation. The policy is viewed as a strategic countermeasure to U.S. tariff pressures and reflects Beijing’s growing control over critical mineral supply chains.
Exports of rare-earth magnets to U.S. companies plunged automotive and defense supply chains experienced delays and severe price spikes (magnet prices rising up to 60‑fold). Many firms struggled to source crucial inputs like neodymium magnets.
High‑level talks in June and July 2025 led to a partial agreement where China agreed to resume exports via “green channels” for trusted U.S. buyers, while the U.S. provided concessions. However, China’s licensing system remains in place, and negotiations are ongoing.
Organizations sourcing rare earths from China must: Work with suppliers to ensure MOFCOM export licenses, Provide technical and end-use documentation for licensing, Track shipments and compliance in logistics systems, Monitor policy developments, quotas, and confirm origin claims.
Diversify sourcing through manufacturers outside China (e.g. MP Materials, Niron), Stockpile strategic magnets or components, Invest in supply chain mapping and traceability, Explore material substitution and R&D for alternatives to heavy rare-earth magnets, Partner with allied governments or producers to scale domestic refining capacity.