U.S.' inability to replace rare earths supply from China poses a threat to its defense, warns CSIS

As China imposes export controls on rare earth elements, the U.S. would be unable to fill a potential shortfall, according to the Center for Strategic and International Studies — and this could threaten Washington's military capabilities.

Amid U.S. President Donald Trump's escalating tariffs on China, Beijing earlier this month imposed export restrictions on seven rare earth elements and magnets used in defense, energy and automotive technologies. 

The new restrictions — which encompass the medium and heavy rare earth elements samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium — will require Chinese companies to secure special licenses to export the resources. 

Though it remains to be seen exactly how China will implement this policy, the CSIS report, published Monday, warns that it will likely result in a pause in exports as Beijing establishes the licensing system, and cause disruptions in supply to some U.S. firms. 

The New York Times reported earlier this week that a pause in China's rare earth element exports was already occurring.

As China effectively holds a monopoly over the supply of global heavy rare earths processing, such restrictions pose a serious threat to the U.S., particularly its defense technology sector. 

"The United States is particularly vulnerable for these supply chains," CSIS warned, emphasizing that rare earths are crucial for a range of advanced defense technologies and are used in types of fighter jets, submarines, missiles, radar systems and drones. 

Along with the export controls, Beijing has placed 16 U.S. entities — all but one in the defense and aerospace industries — on its export control list. Placement on the list prevents companies from receiving "dual-use goods," including the aforementioned rare earth elements.