# Japan confronts rare earth magnet squeeze under China curbs in August *China shipped 212 tons of permanent magnets to Japan in August, rebounding 90.3% from July but remaining 17.1% below 2025 levels under Beijing's tightened export licensing rules.* **Published:** September 20, 2026 **By:** Kenji Sato **Section:** Semiconductors & AI Hardware — Japan **Format:** Policy Tracker **Confidence:** high **Source:** https://eastasiabrief.com/semiconductors/japan-confronts-rare-earth-magnet-squeeze-under-china-curbs-334 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - China exported 212 tons of rare earth magnets to Japan in August, down 17.1% year-on-year - Japanese motor makers depend on China for more than 90% of separated heavy rare earth inputs - Beijing enforces its 0.1% extraterritorial re-export rule under Announcement No. 61 on Nov. 10, 2026 ![A technician uses tweezers to assemble a precision motor component beside bins of metal parts in an automated factory. (AI-generated image)](https://eastasiabrief.com/media/2026-09-20-195cccacdb30.webp) *A technician uses tweezers to assemble a precision motor component beside bins of metal parts in an automated factory. (AI-generated image)* China's General Administration of Customs recorded Sept. 20 that exports of rare earth permanent magnets to Japan reached 212 tons in August, falling 17.1% from the same month last year. The August volume climbed 90.3% from 111 tons in July. Japanese precision motor and automotive component makers continue to face irregular deliveries as Beijing maintains strict export reviews on advanced magnetic materials. Permanent magnets made from neodymium, dysprosium and terbium generate rotational force in electric vehicles, industrial robots and wind turbines. Japan depends on Chinese separation plants for almost all of its heavy rare earth inputs. Chinese regulatory pressure began escalating early last year. China's Ministry of Commerce and the General Administration of Customs issued Announcement No. 18 on April 4, 2025, placing seven medium and heavy rare earth elements under export licensing. The licensing mandate covered samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. Japanese trading companies reported that shipping clearances that once took days began stretching into multiple weeks following the April 2025 decree. Beijing expanded that control regime on Oct. 9, 2025 by issuing four ministerial announcements. Announcement No. 62 prohibited Chinese enterprises from exporting proprietary technologies used in rare earth mining, ore dressing, smelting, separation and permanent magnet fabrication. Announcement No. 56 restricted exports of specialized processing hardware, including centrifugal extractors. Announcement No. 57 established additional export control parameters for medium and heavy rare earth items, entering into force Nov. 8, 2025. Those technical restrictions targeted overseas processing facilities attempting to operate outside China. Japanese magnet manufacturers can buy unrefined mineral ore from mines in Australia, but chemical separation into metallic form still relies heavily on Chinese facilities. Announcement No. 61 introduced extraterritorial controls over foreign products containing Chinese rare earth inputs. Foreign manufacturers must obtain a Chinese export licence if Chinese-origin items represent 0.1% or more of the value of their finished goods. Chinese trade authorities deferred the enforcement date for Announcement No. 61 until Nov. 10, 2026. The postponement provided short-term operational breathing room, but the 0.1% threshold leaves Japanese component exporters exposed to cross-border penalties. Trade friction worsened at the start of this year. China's Ministry of Commerce enacted an export ban on dual-use items with potential military utility on Jan. 6, 2026, designating Japan as the explicit target of the restrictions. Japanese Minister of Economy, Trade and Industry Ryosei Akazawa lodged a formal protest during a Tokyo press conference on Jan. 9, 2026. Akazawa demanded that Chinese authorities revoke the selective export controls against Japanese industry immediately. The Japanese government enacted domestic countermeasures to protect factory supply lines. The Ministry of Economy, Trade and Industry established a technical roadmap for auxiliary materials on April 21, 2026 to speed the adoption of alternative magnet formulations. The ministry issued its Trade Strategy 2026 on June 15, 2026. The strategy document formalized initiatives to diversify critical mineral supply chains and authorized larger capital contributions to the Japan Organization for Metals and Energy Security, known as JOGMEC. JOGMEC provides equity capital, debt financing and liability guarantees for Japanese companies developing mineral resources abroad. The state institution has expanded funding for mining and refining projects in Australia, North America and Southeast Asia. The agency operates under Japan's Economic Security Promotion Act, which classifies permanent magnet rare earths as designated critical commodities. The law authorizes the Japanese government to subsidize up to half of eligible private sector capital expenditure. Upstream mining investments have reduced Japanese dependence on Chinese raw ore. Downstream processing, however, presents an enduring bottleneck because China maintains control over more than 90% of global commercial capacity for separating heavy rare earths. Heavy rare earths such as dysprosium and terbium remain critical additives in traction motors. The two elements prevent neodymium-based permanent magnets from losing magnetic strength under the intense heat generated during sustained electric vehicle operation. Alternative chemical separation plants in allied nations face extended construction schedules and high operating costs. As a result, Japanese motor assemblers cannot yet replace Chinese heavy rare earth compounds in their highest-performance product lines. The persistent exposure caused Japanese imports of Chinese magnets to plunge to 111 tons in July. While the August rebound to 212 tons brought temporary relief, the 17.1% year-on-year contraction indicates that supply channels remain constrained. Japanese motor manufacturers have redesigned magnetic layouts to reduce dysprosium ratios in standard passenger vehicles. Industrial servomotors and defense applications, however, still require heavy rare earth concentrations that have no commercial substitutes. Neither China's Ministry of Commerce nor Japan's Ministry of Economy, Trade and Industry published a new administrative decree on Sept. 20 regarding the supply disruptions. Supply chain managers are now preparing for Beijing's deferred compliance deadline. Chinese customs authorities will begin enforcing the 0.1% extraterritorial re-export rule under Announcement No. 61 on Nov. 10, 2026. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | China rare earth export controls | Posco International and motor suppliers face tighter dysprosium quotas | MOFCOM controls over 90% of global heavy rare earth separation | Motor makers see magnet imports fall 17.1% year-on-year to 212 tons | EV traction motor BOM costs face upward pressure on dysprosium premiums | ## In this story - **Companies:** JOGMEC - **Policy:** Export Controls, Economic Security - **Impact:** Supply Chain, Compliance, Cost Structure ## Primary sources 1. mofcom.gov.cn 2. meti.go.jp 3. kdi.re.kr 4. koreapost.co.kr 5. mt.co.kr --- Cite as: East Asia Brief, "Japan confronts rare earth magnet squeeze under China curbs in August," September 20, 2026. https://eastasiabrief.com/semiconductors/japan-confronts-rare-earth-magnet-squeeze-under-china-curbs-334