China restricts rare-earth exports to Japan in escalating dispute

China has restricted exports of rare earths and rare-earth magnets to Japan, and Japan's vice foreign minister has formally asked China to withdraw the measures.

China has moved to restrict exports of rare earths and rare-earth magnets to Japan. Beijing also announced a broader ban on exports of so-called dual-use goods to Japan after remarks by Prime Minister Sanae Takaichi about possible involvement in a conflict over Taiwan. Rare earths are used in components for electronics, cars and some defense applications. China has used control over these materials before in trade disputes. Key facts: - On Tuesday, China announced a broad ban on exports of dual-use goods to Japan, reported by state and trade sources. - In the days that followed, exporters in China reported new restrictions on scarce "heavy" rare earths and on powerful magnets containing them. - A person familiar with Chinese government decisions said reviews of export license applications to Japan have been halted. - Japan's vice minister for foreign affairs, Takehiro Funakoshi, spoke with China's ambassador and demanded withdrawal of the recent export-control measures. - China's Ministry of Commerce said exports of goods for civilian use would not be affected and described the measures as legitimate and lawful. - Nomura Research Institute estimated potential economic losses of about $17 billion over a year if the restrictions are maintained. Summary: The measures could disrupt Japanese manufacturers that rely on Chinese rare earths and have implications for broader electronics and automotive supply chains, analysts and industry figures said. Japan has formally protested and asked for the export controls to be withdrawn. Undetermined at this time.