The European defense industry is sounding the alarm about serious supply chain risks following China’s announcement of new export restrictions on rare earths and critical materials that will go into effect on December 1. The Aerospace, Security and Defence Industries Association of Europe (ASD), which represents more than 4,000 companies, including Airbus, BAE Systems, and Rheinmetall, said it is “following closely” developments in China’s actions, which will involve prohibition of exports to foreign militaries.
Analysts warn the action could hinder Europe’s supply of ammunition, high-tech defense systems, radar systems, drones, and fighter jets, just as Europe gets serious about rearmament and Russian aggression is escalating. China supplies over 30% of the EU’s tungsten and provides nearly all supply of magnesium to the EU, while demand for rare earths is estimated to grow sixfold by 2030. Brussels is trying to diversify with its Critical Raw Materials Act, which aims to meet 10% of demand domestically and 40% through processing by 2030. But experts warn that changes will take time, and Europe will still be exposed in the meantime.
The restrictions also come just before a Trump-Xi meeting at the APEC summit, which has led to speculation that Beijing may be using rare earths as a bargaining chip in broader geopolitical discussions. EU Trade Commissioner Maroš Šefčovič called the measures “unjustifiable,” and has requested urgent discussions with his Chinese counterpart. As Europe attempts to gain strategic autonomy in defence, China’s export restrictions are evidence of how crucial supply chains have become yet another theatre in the global competition for power.
