Updated: July 2025
The competition between China and the US has reached a new level of complexity, moving from simple trade to contention for control of strategic raw materials. At the heart of this challenge are rare earths, a group of building blocks that are critical to electronics, green energy, and the defense industry. But in particular, it is the export of permanent magnets, especially those based on neodymium (NdFeB), that has become the focus of global tension today.
In the supremacy over the geopolitics of permanent magnets, China plays a dominant role, with a calculated customs tightening.
In addition to being the world leader in the production of rare earths, China almost completely dominates the supply chain of high-performance permanent magnets. These components are indispensable for the production of electric motors, wind turbines, sensors, industrial robots, advanced medical devices, high-precision weapons, and much more.
In 2024, China exported about 60,000 tons of permanent magnets, covering more than 90% of the world’s demand.
No other country is currently able to match the production capacity, quality and price of Chinese magnets. This extreme dependence represents a strategic risk for the entire West.
As of July 2024, the Chinese government has introduced export duties on several types of rare-earth magnets, affecting in particular:
- Rare earth magnets: NdFeB and samarium cobalt (the most used in the automotive and aerospace industries);
- Bonded magnets, used in consumer electronics;
- Assembled magnetic components, ready for industrial integration.
These measures apply to all countries, but are clearly aimed at curbing technological growth in the United States, Japan and Europe. In addition to forcing them in this way to invest in more expensive or less efficient alternatives.
The Western response is a race against time.
This new urgency fits fully into the broader geopolitics of rare earths, where control of supply chains has become a strategic lever. For the European Union, the situation is becoming particularly critical. Currently, the EU imports about 98% of its permanent magnets from China. The new Chinese tariffs are already affecting the costs of production lines in Germany, Italy and France, particularly in the automotive and renewable energy sectors.
In the United States, however, the government has allocated public funds to develop a national magnet industry, in collaboration with partners such as Australia, South Korea and Japan. This process of production relocation is known as ‚reshoring‘ and aims to rebuild internal or allied supply chains to reduce strategic dependence on China.
The European Union, with the Critical Raw Materials Act, has included magnets among the critical components to be produced internally. The plan provides that by 2030 the EU must:
- extract at least 10% of its critical raw material needs,
- work and transform at least 40% internally,
- recycle at least 15% of the materials used.
Countries such as Sweden, Norway, Portugal and Italy are at the center of new exploration and mining projects. France and Germany , on the other hand, focus on recycling and advanced research to reduce this dependence. Many European companies are re-evaluating their suppliers or anticipating reshoring plans and investing in alternative technologies (such as rare-earth magnets). The technological gap, however, is still wide and the timing of industrial development is not compatible with the urgency imposed by Chinese tariffs.
Conclusions: a new phase in the geopolitics of rare earths
The trade war on rare earths has entered a more subtle but potentially more disruptive phase. China is in fact using permanent magnets as a new tool of geopolitical pressure. A more sophisticated and less obvious tool than a direct embargo, but just as effective. In a world where the energy transition and technological autonomy are strategic priorities, controlling the „invisible nodes“ of the global production chain, such as magnets, means controlling the pace of other people’s development.
While Beijing strengthens its position, imposing tariffs and conditioning exports, the West is faced with an obligatory choice: accelerate industrial autonomy or risk losing control over entire technological and strategic sectors.
Europe, still lacking a complete value chain, finds itself exposed. If it fails to quickly close the production gap and diversify sources, the new geopolitics of rare earths could turn into a long-lasting industrial crisis.
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