The agency said $4.2 trillion of the exposure falls on IEA members as China’s tightening controls deepen risks for autos, defence, electronics, wind energy and EV supply chains.
China’s rare earth export controls could put about $6.5 trillion of downstream economic activity outside its borders at risk, with roughly $4.2 trillion of that exposure falling on IEA member countries, according to the International Energy Agency’s April 8, 2026 report. The warning underscores how deeply global manufacturing depends on a supply chain that remains heavily concentrated in China. The IEA said the risk spans automotive manufacturing, electronics, defence, wind energy and electric vehicles, with heavy rare earths facing the tightest bottlenecks because they are critical to high-performance permanent magnets. China accounts for around 60% of mined magnet rare earths, more than 91% of global refining capacity and 94% of sintered permanent magnet production, leaving downstream industries vulnerable to export curbs even when the immediate volumes involved are relatively small. The controls have tightened in stages, beginning with restrictions on heavy rare earths in April 2025 and broader export rules in October 2025, before a one-year suspension announced in November 2025. By June 2026, China had also imposed targeted export restrictions on specific U.S. companies including MP Materials and USA Rare Earth, while barring 46 U.S. defense contractors from government procurement. The developments highlight the challenge for Western governments and companies trying to build alternative supply chains as public financing for new critical-minerals projects rises.