Chinese rare earth magnet companies have been facing tighter scrutiny on export license applications since September, sources say, even before Beijing's move last week to expand controls over the critical minerals used in magnets.

China’s Ministry of Commerce justified the restrictions on national security grounds, noting that medium and heavy rare earths have important military applications. Officials emphasized the measures would not prohibit exports entirely, and promised to approve applications meeting regulatory requirements.

From U.S. fighter jets to submarines to cell phones to electric cars, the uses for rare earth minerals are widespread.

The automaker has quietly seeded the revival of the domestic magnet industry, locking down supply amid trade tensions.

The European Union is seeking to coordinate with the United States and other G7 partners a response to tighter Chinese controls on the export of rare earth minerals, trade ministers and officials from the bloc said on Tuesday.

China first introduced rare-earth export restrictions in April in retaliation for tariffs imposed by the Trump administration, causing delays with vehicle production and forcing western companies to stockpile materials.

The pause in the trade war between the U.S. and China may be at risk of breaking open again after Beijing implemented restrictions on rare earth exports.

“We should not miss the fundamental point on rare earths: China has crafted a policy that gives it the power to forbid any country on Earth from participating in the modern economy,” Dean Ball, who served as a senior advisor in the White House Office of Science and Technology Policy earlier this year, wrote on X on Saturday.