Volt Insight Briefing: The rare earth nobody was watching

Happy Friday from a very hot London.

When President Trump met with President Xi Jinping last month, the White House said China would address US concerns over rare earth exports. First on its list of rare earths was unusual choice: yttrium.

For years, policymakers have worried about China’s dominance in the rare earths used in permanent magnets for electric vehicles, wind turbines and defence systems. Yet when I speak to industry executives they say yttrium was the element that surprised them most when Beijing imposed export controls on seven rare earths in April 2025.

The lesson is that some of the most important vulnerabilities may be the ones nobody is paying attention to.

Exports from China collapsed after Beijing’s April 2025 controls, and have resumed in a trickle from October with a spike in March 2026. In May, China exported no yttrium oxide or metal to the United States.

Yttrium may be unknown and not a household name yet it’s actually one of the most strategic of the seven that Beijing put export controls on. That’s because it is needed for gas turbine blades and jet engines, as part of a coating that helps the blades withstand the high temperatures of operation.

The US may have little capacity to produce powerful rare earth magnets, but what it does have is large industries producing jet engines and gas turbines. GE Vernova is one of the largest gas turbine producers in the world, for example.

Without these yttria-stabilised zirconia thermal barrier coatings, the blades would melt. The US is almost 100% reliant on imports of yttrium, almost all of it from China.

When you combine this with the fact that China’s export controls on rare earths last April 2025 came amid an AI data centre boom in the US you begin to understand the scale of the problem. Goldman Sachs estimates that power demand from US data centres will more than double by 2027. A lot of this will be powered by gas turbines.

More than a year later, the latest trade data as well as actions from China’s Ministry of Commerce suggest Beijing has little intention of loosening its grip, with, as I said, only partial shipments being granted licenses. In addition, Beijing is trying to stop re-routing of Chinese rare earths via third countries. Where does that leave the US?