Key takeaways:

• Rare earth minerals are used in everyday tech from phones to electric vehicles
• The majority of rare earth refining and magnet production currently happens overseas, but deposits in the U.S. may change that
• Supply chain changes from rare earths may lead to slower product upgrades and modest price shifts

Rare earths are essential to modern electronics, and new export rules could disrupt production and delay product upgrades in 2025.

Rare earths have gained attention during recent tariff discussions.  That’s not because they’re a new phenomenon, but because they’re essential to modern technology. These minerals can be used to produce super-powerful magnets that power smartphones, laptops, electric vehicle (EV) motors, and home appliances.¹ Although the rare earth minerals sector is about $6.5 billion globally, it plays a major role in how much larger industries produce their products — and what consumers pay for them.² 

Recent updates to export rules from China, the world’s largest rare earth producer, have added new approval steps for certain materials and technologies.^3,4 These changes may be disruptive on their own, which may be compounded by the fact that the world’s concentrated supply of rare earth minerals may have an outsized impact on their price and sourcing.

Why rare earth minerals matter

Rare earth elements appear in small amounts across a variety of household technologies.⁵ Smartphones use rare earth magnets in their speaker and camera assemblies, while laptops rely on them for compact, efficient components.⁶ EVs depend on high-performance magnets to help power drivetrains that make them move quietly and effectively.⁷ Appliances use sensors and motors made from these materials as well.⁸ This wide range of rare earth mineral uses is one reason they’re at the forefront of international trade discussions.

The rare earth industry is relatively small.⁹ Most refining and magnet production still takes place in China, where early investments and lower production costs built a lead over other sources.¹⁰ Today, China accounts for about 60% of rare earth mining and nearly 90% of refining worldwide.11 Other countries, including the U.S., have rare earth deposits, but many remain untapped due to high startup costs, complex extraction processes, and lengthy permitting timelines.¹² However, recent changes to Chinese export rules and trade policies have prompted some companies to reconsider where and how they source rare earth minerals.¹³

Some firms are investing in domestic production to help reduce their reliance on overseas production. For example, MP Materials — a U.S. company that owns the only large-scale rare earth mine and processing facility in North America — has partnered with Apple on a $500 million initiative to expand U.S. magnet manufacturing and recycling.¹⁴ These projects are intended to ease long-term supply constraints, but may take years to scale.

Read more: Tariffs on wood and furniture imports could hit home

How this may affect consumers

China’s latest export rules now require case-by-case Chinese government approval for the export of rare-earth magnets and related tech, which may create some uncertainty within global supply chains.¹⁵ These changes have not halted trade entirely. They have lengthened delivery times and increased administrative costs, however. Some manufacturers still chose to increase their inventory of rare earth-containing components and adjust product releases.¹⁶

Consumers may not see sudden price changes tied directly to rare earth sourcing.¹⁷ The same is true for the benefits of building out alternative supply. Mining and refining projects take years to ramp up, meaning manufacturers may end up adjusting features, staggering product rollouts, and managing costs before raising sticker prices.¹⁸

Read more: How mega-retailers are turning tariffs into opportunity

Phones and personal devices

Phones depend on rare earth magnets for key functions.¹⁹ The demand for magnet-related rare earths is projected to rise from about 59,000 tons globally in 2022 to roughly 176,000 tons by 2035.²⁰ If sourcing becomes more complex over the long-term, manufacturers may end up spreading hardware upgrades over longer product cycles or reserve advanced features for high-end versions of their products.²¹ These shifts tend to appear gradually, but they can influence how long certain models stay in the market. 

China expanded its rare-earth export-control list to include five additional elements in addition to the seven already restricted.²² This means exporters must obtain government approval for shipment that includes these broader set of elements.²³ This may create longer delivery timelines to manufacturers, and could add compliance costs that affect global supply chains. For consumers, that could translate into subtle production delays or smaller product runs.

Home tech and appliances

Appliances use rare earths to power compact motors and sensors.²⁴ If China's exports fall, there may be a tightening of materials moving to manufacturers. This could result in price adjustments gradually — likely across several product cycles year-over-year.²⁵ These shifts often reflect updated sourcing timelines more than direct material shortages.

In other words, shortages today do not necessarily lead to sudden price increases, based on how far in advance many components are sourced. Many are offsetting the impact by sourcing regionally or by adopting less material-intensive motor designs. These choices may help maintain steady retail pricing for the long term.

Design and performance shifts: Reengineering without disruption

Rare earth supply chains continue to evolve as new mines, refining facilities, and recycling operations take shape globally. These efforts are meant to broaden where supplies come from in the long-term while also reducing bottlenecks within product availability. With a bit of planning and patience, consumers can plan for gradual changes while continuing to rely on the technology that powers daily life.