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IEA Warns $6.5 Trillion at Risk from China Rare Earth Curbs

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The International ​Energy Agency warned that China's rare earth export controls, introduced in April 2025 and expanded in October 2025, could threaten $6.5 trillion in annual downstream output outside China if fully enforced.

Automakers have already faced production cuts, according to the IEA's Global Critical Minerals Outlook 2026 report released Thursday. Despite a one-year delay, supply chains remain highly concentrated.

The report urges policymakers to focus on strategic minor minerals, where small markets carry outsized economic risks.

IEA chief Fatih Birol said diversification costs could be absorbed as "economic insurance" against major risks, noting rare earths account for less than 1% of a vehicle's value.

However, tackling technology bottlenecks and workforce shortages outside China remains a critical challenge for building resilient supply chains.

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