Germany’s Defense Industry Faces Pressure as China Tightens Rare Earth Exports

Germany’s defense sector is facing growing uncertainty after China tightened export controls on rare earth elements — critical materials used in advanced weapons, vehicles, and electronic systems. The move, part of Beijing’s ongoing trade dispute with the United States, has placed German arms manufacturers in a difficult position due to their heavy reliance on Chinese supply chains.
Rare earth metals are vital for producing fighter jets, submarines, precision-guided ammunition, and armored vehicles. More than 400 kilograms of these materials are needed for a single F-35 stealth jet. With China controlling nearly 80% of global rare earth production and over 90% of refining capacity, European manufacturers are highly exposed to disruptions.
Industry leaders have voiced concern that the new export rules — which require companies to disclose sensitive information — pose risks of industrial espionage. The Federation of German Industries (BDI) warned that the measures could hinder Europe’s rearmament and modernization efforts. Despite this, German defense firms maintain that they have short-term contingency plans to avoid production halts.
Experts, however, caution that Europe’s lack of alternative refining capacity makes long-term independence from China difficult. Calls are growing for the EU to invest in domestic mining and processing capabilities, streamline environmental regulations, and coordinate raw material strategies across member states.
Germany once relied on importing refined rare earths from China for economic efficiency, but the situation has now become a geopolitical vulnerability. Without decisive action, analysts warn, the German defense industry could face bottlenecks that weaken its ability to meet national and allied security commitments.