China’s rare earth curbs hit US aerospace, chips hard despite trade truce
South China Morning Post
by ReutersFebruary 26, 2026
AI-Generated Deep Dive Summary
China’s restrictions on rare earth exports are causing significant challenges for U.S. aerospace and semiconductor industries, despite a trade truce between the two nations. Rare earth elements like yttrium and scandium, critical for high-temperature coatings in jet engines and advanced chip production, are almost entirely produced in China. Recent reports indicate that suppliers to major U.S. companies are facing severe shortages, with some even turning away clients due to limited availability.
The situation has worsened since China imposed export restrictions in April, with customs data showing minimal shipments of these materials reaching the U.S. Even though trade tensions have eased somewhat, the bottleneck persists, raising concerns about supply chain resilience. Yttrium, a key component for engine coatings that prevent melting at extreme temperatures, has seen its price surge by 60% since November, now making it 69 times more expensive than a year ago.
This scarcity is forcing manufacturers to ration materials and adapt to higher costs, potentially disrupting production in critical sectors. The issue underscores China’s dominant role in the rare earth market and highlights vulnerabilities in global supply chains for defense, aerospace, and semiconductor industries. As U.S.-China relations continue to evolve, this challenge could have broader implications for international trade and technological competition.
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Originally published on South China Morning Post on 2/26/2026