Case 6 · Event 10
How exposed are magnet and motor makers to China's controls, and who could supply instead?
After “China’s 2025 export licensing requirements on REEs and permanent magnets”, an “80% reduction in REEs supply” costs Japan, the US and Germany “1.8, 1.5, and 1.2 percent” of GDP at horizons under a year; at longer horizons “aggregate losses become negligible”.
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The paper models “a hypothetical scenario of stringent but partial Chinese export restrictions on rare earths lasting for 18 months” and its spread through global value chains, with US output losses “between 0.3% and 0.6%”.
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In a hypothetical split of the world into two geopolitical blocs, “Mineral markets critical for the clean energy transition”, with selected farm commodities, “appear among the most vulnerable”.
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The papers’ questions measured again on UN Comtrade records. Each reading below is written from these numbers, not from the papers.
The largest exporter, 2024: Rare-earth compounds (oxides, carbonates): Myanmar 32.7%, Rare-earth metals and alloys: Vietnam 38.5% and Permanent magnets of metal (NdFeB, SmCo): China 63.6%.
| Rare-earth compounds (oxides, carbonates) | 1 | Myanmar | 32.7% |
| Rare-earth compounds (oxides, carbonates) | 2 | China | 16.3% |
| Rare-earth compounds (oxides, carbonates) | 3 | Malaysia | 13.7% |
| Rare-earth compounds (oxides, carbonates) | 4 | Laos | 10.4% |
| Rare-earth compounds (oxides, carbonates) | 5 | Japan | 7.8% |
| Rare-earth compounds (oxides, carbonates) | 6 | United States | 3.6% |
| Rare-earth compounds (oxides, carbonates) | 7 | France | 3.3% |
| Rare-earth compounds (oxides, carbonates) | 8 | India | 1.4% |
| Rare-earth compounds (oxides, carbonates) | 9 | Norway | 1.3% |
| Rare-earth compounds (oxides, carbonates) | 10 | Italy | 1.3% |
| Rare-earth metals and alloys | 1 | Vietnam | 38.5% |
| Rare-earth metals and alloys | 2 | Australia | 25.2% |
| Rare-earth metals and alloys | 3 | China | 21.2% |
| Rare-earth metals and alloys | 4 | Thailand | 7.9% |
| Rare-earth metals and alloys | 5 | Malaysia | 2.4% |
| Rare-earth metals and alloys | 6 | Japan | 2.3% |
| Rare-earth metals and alloys | 7 | United States | 0.67% |
| Rare-earth metals and alloys | 8 | Lithuania | 0.38% |
| Rare-earth metals and alloys | 9 | Estonia | 0.37% |
| Rare-earth metals and alloys | 10 | Austria | 0.25% |
| Permanent magnets of metal (NdFeB, SmCo) | 1 | China | 63.6% |
| Permanent magnets of metal (NdFeB, SmCo) | 2 | Japan | 8.8% |
| Permanent magnets of metal (NdFeB, SmCo) | 3 | Philippines | 6% |
| Permanent magnets of metal (NdFeB, SmCo) | 4 | Vietnam | 5.9% |
| Permanent magnets of metal (NdFeB, SmCo) | 5 | Germany | 4% |
| Permanent magnets of metal (NdFeB, SmCo) | 6 | United States | 1.8% |
| Permanent magnets of metal (NdFeB, SmCo) | 7 | Malaysia | 1.4% |
| Permanent magnets of metal (NdFeB, SmCo) | 8 | Korea | 0.87% |
| Permanent magnets of metal (NdFeB, SmCo) | 9 | Thailand | 0.85% |
| Permanent magnets of metal (NdFeB, SmCo) | 10 | Switzerland | 0.81% |
United States’ share of China’s permanent magnets of metal (NdFeB, SmCo) exports: 12% in Jan 2024, 10.5% in Jun 2026. Lowest 10.2% in Apr 2026.
| Jan 2024 | 12% | 16.7% | 11% | 5.2% | 8.9% | 4.4% | 41.8% | – | −13.7% | yes |
| Feb 2024 | 12.1% | 17% | 10.5% | 5.3% | 9% | 4.4% | 41.7% | – | −15.3% | yes |
| Mar 2024 | 12.1% | 17.1% | 10.2% | 5.2% | 9.2% | 4.5% | 41.6% | – | −16.9% | yes |
| Apr 2024 | 12.2% | 16.9% | 10.1% | 5.1% | 9.5% | 4.6% | 41.7% | – | −18.5% | yes |
| May 2024 | 12% | 16.9% | 10.2% | 5% | 9.8% | 4.7% | 41.4% | – | −18.7% | yes |
| Jun 2024 | 12.1% | 16.6% | 9.8% | 5% | 10.2% | 4.8% | 41.6% | – | −19.6% | yes |
| Jul 2024 | 12.1% | 16.5% | 9.8% | 4.9% | 10.3% | 4.9% | 41.5% | – | −18.7% | yes |
| Aug 2024 | 11.9% | 16.2% | 9.1% | 4.9% | 10.5% | 5% | 42.4% | – | −18.4% | yes |
| Sep 2024 | 11.8% | 15.8% | 8.6% | 4.9% | 10.5% | 5.1% | 43.2% | – | −17.9% | yes |
| Oct 2024 | 11.6% | 16.3% | 8.1% | 4.8% | 10.6% | 5.1% | 43.4% | – | −15.9% | yes |
| Nov 2024 | 11.4% | 16.4% | 8.1% | 4.9% | 10.5% | 5.1% | 43.6% | – | −13.5% | yes |
| Dec 2024 | 11.2% | 16.3% | 8.3% | 4.9% | 10.6% | 5.2% | 43.4% | – | −11.9% | yes |
| Jan 2025 | 11.4% | 16.3% | 8.3% | 5% | 9.7% | 5.4% | 44% | −0.7 pp | −13% | no |
| Feb 2025 | 11.3% | 16.4% | 8.5% | 5.1% | 9.2% | 5.4% | 44.2% | −0.8 pp | −13.5% | no |
| Mar 2025 | 11.2% | 16.7% | 8.7% | 5.3% | 8.5% | 5.6% | 44.1% | −0.9 pp | −12.7% | no |
| Apr 2025 | 11% | 17.3% | 8.5% | 5.4% | 7.7% | 5.9% | 44.2% | −1.2 pp | −12.5% | no |
| May 2025 | 11% | 18% | 7.9% | 5.3% | 7% | 6% | 44.8% | −1.1 pp | −14.4% | no |
| Jun 2025 | 10.7% | 18.5% | 7.9% | 5.4% | 6.2% | 6.1% | 45.2% | −1.3 pp | −15.4% | no |
| Jul 2025 | 10.5% | 18.9% | 8.1% | 5.6% | 5.1% | 6.2% | 45.7% | −1.6 pp | −16.9% | no |
| Aug 2025 | 10.7% | 19.1% | 8.2% | 5.8% | 4.1% | 6.4% | 45.8% | −1.2 pp | −16.2% | no |
| Sep 2025 | 10.8% | 19.4% | 9.1% | 6% | 3.1% | 6.4% | 45.4% | −1 pp | −15.9% | no |
| Oct 2025 | 10.6% | 20% | 9.6% | 6.1% | 2.1% | 6.5% | 45.1% | −1 pp | −16.7% | no |
| Nov 2025 | 10.9% | 20.4% | 9.9% | 6.2% | 1% | 6.6% | 44.9% | −0.5 pp | −17.1% | no |
| Dec 2025 | 11% | 20.9% | 10.2% | 6.2% | 0% | 6.6% | 45.1% | −0.2 pp | −16% | no |
| Jan 2026 | 10.6% | 21.6% | 10.7% | 6.3% | 0% | 6.5% | 44.4% | −0.8 pp | −14.4% | no |
| Feb 2026 | 10.3% | 21.9% | 10.8% | 6.4% | 0% | 6.5% | 44.2% | −1 pp | −12.1% | no |
| Mar 2026 | 10.4% | 21.9% | 10.8% | 6.2% | 0% | 6.4% | 44.3% | −0.8 pp | −9.9% | no |
| Apr 2026 | 10.2% | 21.9% | 11.7% | 5.6% | 0% | 6.3% | 44.3% | −0.8 pp | −6.3% | no |
| May 2026 | 10.4% | 21.7% | 12.1% | 5.7% | 0% | 6.3% | 43.9% | −0.6 pp | +1% | no |
| Jun 2026 | 10.5% | 21.7% | 12.5% | 5.7% | 0% | 6.4% | 43.2% | −0.3 pp | +8.2% | no |
Cut China's rare-earth compounds, metals and magnets by 0–100% (80% by default, the shock in Bogmans et al.) and pass the shortfall to motor and wind-turbine makers
| Importer | At risk, share of its imports | Its other suppliers would ship |
|---|---|---|
| 78.6% | +4,626% | |
| 71.4% | +668% | |
| 71.3% | +654% | |
| 69.9% | +555% | |
| 69.8% | +550% | |
| 68.3% | +468% | |
| 67% | +414% | |
| 66.3% | +388% | |
| 65.8% | +369% | |
| 65.7% | +367% | |
| 64.8% | +341% | |
| 64.6% | +337% |
* Did not file this period: its imports are seen through its partners’ reports.
Who could fill the gap: Russia, 78.6% of its imports
The suppliers it already buys from, in proportion to their shares: each would have to ship 4,626% more. Share now, then the part of the gap it would take:
The largest other exporters, by share of world exports
Electric motors (multi-phase AC, large DC)
Upper bound (100% pass-through, no use share). This stage feeds only this chain, so the chain file gives it no use share and the whole shortfall passes down.
46.4% of world electric motors (multi-phase AC, large DC) exports at risk in the first round, summed over the 24 large exporters with an exposure upstream. The 8 listed below carry 32.3%.
| Exporter | Its exposure upstream | World exports at risk |
|---|---|---|
| Germany | 68.3% | 11.5% |
| Mexico | 64.8% | 5.1% |
| United States | 60.2% | 3.9% |
| Brazil | 64.6% | 2.9% |
| Italy | 61% | 2.5% |
| Hungary | 56% | 2.4% |
| Czechia | 65.7% | 2.2% |
| Finland | 65.8% | 1.8% |
Wind turbines
Upper bound (100% pass-through, no use share). This stage feeds only this chain, so the chain file gives it no use share and the whole shortfall passes down.
36.7% of world wind turbines exports at risk in the first round, summed over the 22 large exporters with an exposure upstream. The 8 listed below carry 35.5%.
| Exporter | Its exposure upstream | World exports at risk |
|---|---|---|
| Germany | 68.3% | 17.3% |
| Denmark | 52.1% | 6.5% |
| Spain | 54.1% | 5.1% |
| India | 66.3% | 4.6% |
| United States | 60.2% | 0.8% |
| France | 54.5% | 0.45% |
| Mexico | 64.8% | 0.4% |
| UK | 54.9% | 0.39% |
An exporter of the next stage loses its share of world exports × its own exposure upstream (× the use share). Exporters on a closed route lose their own exports × the cut. Exposure upstream is the share of its imported permanent magnets of metal that came from the closed supplier, not of all the permanent magnets of metal it uses: where most are made at home (Japan, Korea, Germany for car parts), it overstates the risk.
First-round arithmetic on trade shares, not a forecast: an importer’s exposure is its import share from the shocked suppliers × the cut. No stocks, no new suppliers, no price changes.
Magnets are a small value in trade, so value shares understate what a shortfall stops; Bogmans et al. need an input-output table augmented with rare earths and substitution elasticities to reach GDP, and find the losses fade at longer horizons, which a first-round map cannot show. Rare-earth ore has no code of its own, most magnets travel inside motors and cars, and licences act on firms and grades that HS codes do not separate. The ECB paper adds inflation and the spread through global value chains.
datasteg: the flow sites
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Where money is made and where it goes: central bank and bank money, and cross-border positions by country pair.
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The world trade network and ten product chains from ore to product, with the events that moved them.
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Funding and trade together: how economies earn, who funds whom against who trades with whom, and what past shocks did to both.
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