New export restrictions imposed by China on rare earth elements have significant implications for U.S. sourcing of these critical materials, particularly for defense technologies. The restrictions require licenses for exports, potentially disrupting supply chains and impacting U.S. firms, especially in the defense sector, per commentary from Center for Strategic and International Studies.

The issue:  

China has imposed new export restrictions on seven rare earth elements (REEs) essential for industries like defense and energy. This move could halt exports as a licensing system is established, leading to significant supply disruptions for U.S. firms, particularly in defense.

Go deeper:  

China accounts for 99 percent of global heavy REE processing, creating a near-monopoly that the U.S. struggles to counter. While the Department of Defense aims to develop a complete REE supply chain by 2027, current U.S. production capabilities remain underdeveloped, leaving it vulnerable. The need for international partnerships is critical to secure alternative sources and reduce reliance on China.

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