The latest developments concerning rare earths reveal an escalating confrontation between the United States and China. In October 2025, China introduced its most stringent restrictions ever on the export of rare earths and related technologies, leveraging its quasi-monopoly as a tool of pressure on Washington.

With over 70% of extraction and more than 90% of refining capacity for rare earth magnets controlled by China, these materials are critical for sectors such as defense, electric mobility, renewables, and advanced technologies.

The new Chinese measures require specific licenses not only for raw materials but also for the transfer of technology and industrial know-how. From December 2025, permits for military or defense uses will be systematically denied, particularly to U.S. companies. Even products processed abroad that include Chinese-origin materials or technologies must be cleared by Beijing. While the official justification concerns national security, these actions are widely interpreted as retaliation for U.S. restrictions on advanced semiconductor exports.

The short-term impacts have included a price surge for rare earths and acute uncertainty for industrial supply chains, especially those integral to electric motor manufacturing. Alternative sourcing options outside China are being explored, but replacing such a dominant supplier remains highly complex and costly. The electric vehicle and advanced motor industries are compelled to rethink supply strategies, exploring new designs (such as motors with reduced rare earth content) and localizing production to mitigate risk.

Speaking on innovation, we remind you that researchers at Texas A&M University, led by Professor Hamid Toliyat, have developed an innovative electric motor that completely eliminates the use of rare earths, replacing them with common materials like copper to achieve performance comparable to traditional motors, thereby reducing geopolitical dependence and environmental impact.

This technology represents am interesting potential step in the electric motor sector, with potential applications ranging from electric vehicles to wind turbines, and the team has already secured patents and funding to bring the innovation to market through a startup.