Category: 3. Business

• Goal is to study the use of ethanol in engines as an alternative to diesel
• Tests will be conducted through 2027 in Vitória-Minas Railway fleet
• Partnership advances the decarbonization of the company’s rail operations

Vale and locomotive manufacturer Wabtec Corporation [NYSE: WAB] have announced a partnership to study a dual-fuel engine capable of running on both diesel and a diesel-ethanol blend. The studies will initially be conducted in laboratories to validate the concept and evaluate performance, emissions reduction, and ethanol/diesel substitution rate. The tests are expected to run through 2027 to assess future application in the Vitória-Minas Railway (EFVM) fleet.

The agreement to use ethanol, a renewable fuel that replaces fossil diesel consumption, is part of a series of joint initiatives with Wabtec to advance Vale’s rail decarbonization program. In January, the companies announced an agreement to purchase 50 locomotives equipped with Evolution Series engines capable of operating with up to a 25-percent biodiesel blend. In the coming years, Vale and Wabtec will conduct a series of tests aiming to further increase this percentage.

“Innovative initiatives like these, aimed at adopting alternative fuels in our locomotives, are part of Vale’s commitment to accelerating the decarbonization of our rail network,” said Carlos Medeiros, Vice President of Operations of Vale. “In 2024, Vale’s rail network accounted for 14% of the company’s carbon emissions”.

“For the first time, Wabtec will use ethanol as an energy source in a locomotive, a milestone in the global rail industry. We are committed to developing technological solutions that accelerate the transition to more efficient and sustainable transportation,” said Danilo Miyasato, President and Regional Leader of Wabtec LATAM.

Net Zero
In 2020, Vale announced its goal to reduce direct and indirect emissions (Scopes 1 and 2) by 33% by 2030. This is another step toward achieving net zero carbon emissions by 2050, in line with the Paris Agreement’s ambition to limit global warming to below 2°C by the end of the century. The company also committed to reducing net emissions from its value chain (Scope 3) by 15% by 2035.

About Vale
Vale is a global mining company that exists to improve life and transform the future together. One of the world’s largest producers of iron ore and nickel, and a significant copper producer, Vale is headquartered in Brazil and operates globally. Its operations include integrated logistics systems, with approximately 2,000 kilometers of railways, maritime terminals, and 10 ports around the world. Vale aims to be recognized by society as a benchmark in safety, the best and most reliable operator, a talent-driven organization, a leader in sustainable mining, and a reference in value creation and sharing.

About Wabtec
Wabtec Corporation (NYSE: WAB) is revolutionizing the way the world moves for future generations. The company is a leading global provider of equipment, systems, digital solutions and value-added services for the freight and transit rail industries, as well as the mining, marine and industrial markets. Wabtec has been a leader in the rail industry for over 155 years and has a vision to achieve a sustainable rail system in the U.S. and worldwide. Visit Wabtec’s website at www.wabteccorp.com.

By Steve Gelsi

Hiring more bankers is paying off, CEO Brian Moynihan says. Separately, Morgan Stanley’s stock hits a record as profit rises above forecasts.

Bank of America benefited from increased dealmaking on Wall Street.

Bank of America Corp.’s stock rallied Wednesday after the megabank’s third-quarter profit blasted past Wall Street expectations on a boost in dealmaking and record net interest income, as consumers and businesses kept spending.

With the good times mostly intact in recent weeks, Bank of America effectively lifted its fourth-quarter outlook for net interest income to a range of $15.6 billion to $15.7 billion, from a range of $15.5 billion to $15.7 billion.

Bank of America’s stock (BAC) rose 4% in recent afternoon trading. The stock briefly reached an 18-year high when it was up 5.5% at its intraday high of $52.85 around midmorning.

Among other big banks, shares of Morgan Stanley (MS), which also reported quarterly results on Wednesday (see more below), ran up 5.4% toward a record close.

Bank of America Chief Executive Brian Moynihan said the bank’s across-the-board improvements in revenue and profit came after steady hiring of dealmakers to play to its strength in business banking and to win market share.

“You’re seeing a lot of activity in the midsized market in the U.S., which we are capturing through the combination of our investment-banking teammates and our commercial-banking teammates,” Moynihan told analysts on the bank’s conference call.

At the same time, the bank has reduced its headcount to about 213,000, from a peak of 217,000 seen over the past three years, as it boosts productivity with investments in technology such as its Erica virtual financial assistant, Moynihan said.

Against this backdrop, the bank’s third-quarter net income increased by 23% to $8.5 billion, or $1.06 a share, from $6.9 billion, or 81 cents a share, in the year-ago quarter.

Bank of America handily topped the FactSet consensus estimate of 95 cents a share. That marked the widest margin for a bottom-line beat since the first quarter of 2023.

Revenue for the latest quarter rose 11% to $28.1 billion, ahead of the Wall Street analyst estimate of $27.5 billion.

Investment-banking revenue increased by 43% to $2 billion, in a particularly big increase among its many business lines.

Despite jitters over the U.S. economy and volatility in markets because of tariffs and geopolitical upheaval during the third quarter, Bank of America’s provision for credit losses – the money it sets aside for bad loans – fell to $1.3 billion from $1.5 billion in the year-ago quarter.

The bank also said its net charge-offs, or money it doesn’t expect to be paid back on credit cards and other loans, dropped to $1.4 billion from $1.5 billion.

While investors grapple with the possibility of an artificial-intelligence bubble and jitters over high-profile bankruptcies of auto-parts maker First Brands and subprime-car-loan specialist Tricolor, client balances rose 11% to $4.6 trillion.

Read: Jamie Dimon warns, ‘When you see one cockroach, there are probably more,’ after Tricolor loan loss

Unemployment is still low, the stock market is at or near record highs, home prices are holding up and wage growth has continued, said Chief Financial Officer Alastair Borthwick.

“The consumer is spending more,” Borthwick said. “While [the media] may ask how they’re feeling, we tend to see how they’re spending, and right now the performance of credit cards is quite good.”

The bank has no exposure to Tricolor’s bankruptcy, Borthwick said. On Tuesday, rival JPMorgan Chase & Co. (JPM) said it had to book a loss on loans to Tricolor.

Bank of America took part in an asset-based loan to First Brands, but Borthwick said the bank’s money is backed by collateral and that the bank has a senior position among lenders in the loan.

CFRA analyst Kenneth Leon upgraded Bank of America’s stock to buy from hold and increased his price target to $58 a share from $52 a share, citing a boost in efficiency resulting from more digital engagement with customers.

“We expect operating leverage to continue in [the fourth quarter of] 2025 with disciplined cost controls and revenue growth,” Leon said. “More adoption for mobile banking and payment solutions is anticipated.”

Looking ahead, Leon said Bank of America faces more risk in traditional lending than capital markets.

“While the consumer remains resilient, we may see credit-card growth slow if the jobs market faces challenges ahead,” Leon said.

Among the highlights in its third-quarter results, the bank’s overall investment-banking team gained 1.36 percentage points of market share during the quarter.

Its third-quarter efficiency ratio improved by 3.29 percentage points.

The bank reported 1 million new credit-card accounts and 212,000 new checking accounts during the quarter.

Net interest income, or the profit it makes from loans minus the costs of paying interest on deposits, rose 9% from a year ago to $15.2 billion, slightly ahead of the consensus analyst estimate of $15.19 billion and a record for the bank.

The bank’s results come a day after JPMorgan Chase & Co., Citigroup Inc. (C), Wells Fargo & Co. (WFC) and Goldman Sachs Group Inc. (GS) all reported stronger-than-expected third-quarter earnings.

Morgan Stanley’s stock advances on fatter third-quarter profit

Morgan Stanley reported third-quarter net income that rose by 44% to $4.6 billion, or $2.80 per share, from $3.2 billion, or $1.88 per share, in the year-ago quarter.

Morgan Stanley topped the analyst estimate of $2.10 a share by 33%, which is its largest earnings beat on a percentage basis since December 2020, when it beat the analyst consensus estimate by 47.9%.

Morgan Stanley’s third-quarter revenue increased to $18.22 billion from $15.38 billion in the year-ago period, ahead of the analyst estimate of $16.69 billion.

The bank’s wealth-management unit saw a 30% pretax margin as it added $81 billion in net new assets.

Its institutional securities unit results were driven by a roughly $1 billion increase in its revenue to $4.1 billion, while its investment-banking business’s revenue jumped to $2.11 billion from $1.46 billion.

Morgan Stanley’s stock has climbed 30.2% in 2025. Meanwhile, Bank of America’s stock has gained 18.6%, ahead of the 13.1% rise in the S&P 500 index SPX and the Financial Select Sector SPDR ETF’s XLF 9.9% advance.

-Steve Gelsi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

  (END) Dow Jones Newswires

  10-15-25 1333ET
Copyright (c) 2025 Dow Jones & Company, Inc.

Agriculture serves as a key bedrock of society. Technological advancements are positioned to help significantly advance this sector, as artificial intelligence (AI) use in agriculture is “projected to grow from $1.7 billion in 2023 to $4.7 billion by 2028.” 

McKinsey & Company asserts that “Agriculture is particularly well suited for disruption by AI and gen AI because of its high volumes of unstructured data, significant reliance on labor, complex supply chain logistics, and long R&D cycles, as well as the sheer number of farmers who value customized offers and low-cost services.” The predictive capabilities of AI in particular are transforming several areas, including problem-solving, regenerative agriculture, yield management and industry workflow. 

In a Forbes article last year, three key issue areas that AI could help to significantly address were discussed: pest control, soil degradation, irrigation and weed management. Across the globe, these problems are responsible for annual losses of $70 billion, $400 billion and $32 billion, respectively. 

AI tools can analyze large amounts of data available from things like historical pest activity and high-resolution drone or satellite images to help quickly and accurately “predict pest invasions and identify pests in the field,” allowing for “targeted interventions, significantly reducing crop losses and chemical usage.” The company Trapview has a device that, using pheromones, is able to attract, trap and identify over 60 pest species. The AI that is used to identify the species is then able to pull in other data on location and weather to predict “the likely impact of the insect and sends the findings to farmers via an app,” also sending calculations for “where and when best to use pesticides…significantly reduc[ing] the use of chemical sprays.” 

Utilizing “data from in-ground sensors, farm machinery, drones, and satellites,” AI can also “analyze soil conditions, including moisture content, nutrient levels, and the presence of pathogens.” This data can be used to improve soil health as well as “predict water needs and automate irrigation systems,” which is another big area in need of improvement, as faulty irrigation is responsible for wasting 60% of the freshwater used in the agriculture industry. CropX, an AI-powered field health system, reports “that its solutions have led to a 57% reduction in water usage, a 15% reduction in fertilizer usage, and up to 70% yield increase.” 

AI-powered image processing is also capable of identifying weeds with high precision and killing them without harming the crops or soil. In a video created by the World Economic Forum, they spotlight an autonomous robot, “Concentrated Light Autonomous Weeding and Scouting,” or CLAWS for short, that uses AI to identify crops and then zaps the growing point of weeds with blasts of concentrated light. Along with its accuracy, it runs by itself using battery and solar power, can operate in rainy weather and covers a little over 11 acres per day. The startup Carbon Robotics uses similar technologies and processes, claiming “to weed up to two acres per hour and eliminate up to 5,000 weeds per minute at 99% accuracy,” with “Its growers report[ing] reducing weed control costs by up to 80% with a potential return on investment in one to three years.” 

AI can also serve a pivotal role in regenerative agriculture, or an approach that “aims to actively improve soil health, increase biodiversity, enhance ecosystem services,” as well as “promotes increasing plant diversity through crop rotation and cover crops, and gradually reduces synthetic inputs over time,” to improve overall sustainability. The tech can be a powerful assistant, “enabling farmers to track improvements and detect issues with unprecedented accuracy” and create predictive performance analytics through the use of large swathes of integrated historical data of satellite images, maps, etc. As the World Economic Forum notes, AI transforms “reactive farming practices into proactive agricultural management strategies.” 

In terms of generating economic value, rather than primarily reducing losses, AI is further expected to create $100 billion worth of value on farms (in yield production) and $150 billion for the agriculture enterprise as a whole (in overall industry business functions). AI could be incorporated into better-informed decision-making by individual farmers, which will ultimately optimize inputs, reduce waste and lead to better yields. On the broader business scale, generative AI can be integrated into both industry research and discovery to help with things like crop innovation, and in the supply chain to “help monitor and identify potential disruptions, such as fluctuations in the weather or changes in global trade flows.” 

As with the adoption of any new technologies, there are associated risks and valid concerns. One of the most notable concerns in terms of AI adoption is that of job losses. A March 2025 MIT Sloan study counters this fear, suggesting that AI is more likely to complement, not replace, human workers. This point is further supported by data showing that as the technology develops, agriculture is in fact expected to gain new jobs, with an expected 30% increase, including almost 3 million new jobs for agricultural equipment operators by 2027. 

Efforts are also already underway to train students, the next generation of farmers and agricultural experts on how to use AI. Microsoft’s FarmBeats for Students is a “micro:bit-based hardware kit with free curated curriculum and activities designed to give students hands-on experience with precision agriculture,” that “empowers educators to inspire their students with exciting possibilities at the intersection of technology, agriculture, and sustainability.” The program focuses on honing students’ ability to gather data through sensors, analyze big data sets and unlock deeper data insights through the leveraging of AI tools. This example, out of the many initiatives across the country of targeted AI education integration, is extremely valuable in ensuring America’s youth are prepared to harness technological innovations to one day meaningfully contribute to the world, in agriculture and beyond. 

These are just a few of the ways AI tools are being and will continue to be integrated into agriculture. By creating pro-innovation regulatory frameworks, the U.S. can continue to see significant advancements, from industries as vital as how our food is produced to whatever new applications America’s future entrepreneurs are able to have the freedom to create.

Image via Unsplash.

Canadian jobs are being “sacrificed on the Trump altar”, union leaders have warned, after the automaker Stellantis announced plans to transfer production of one Jeep model to the United States.

Stellantis announced what it described as its largest US investment push in its 100-year history, saying the $13bn cash injection would create 5,000 jobs across the midwestern United States.

Stellantis told AFP that “as part of this announcement, we will move one model from Canada to the US.”

Unifor, Canada’s largest private-sector union representing thousands of autoworkers, said the model in question was the Jeep Compass, which will shift from a plant in Brampton, Ontario, to Illinois.

Unifor leaders said the jobs were yet more casualties of Donald Trump’s trade war.

“Canadian auto jobs are being sacrificed on the Trump altar,” Lana Payne, Unifor’s national president, said in a statement, calling on Mark Carney’s government “to use Canada’s leverage now to fight for our auto jobs”.

Doug Ford, Ontario’s premier, called the announcement “painful” for workers.

“I have spoken with Stellantis to stress my disappointment with their decision to prioritize investment in the US,” Ford said, also urging Carney “to stand up for the 157,000 workers in Ontario’s auto sector”.

Reshoring auto jobs has been a central plank of Trump’s trade policy.

Canada has been partly spared from his global auto sector tariffs through an existing North American trade pact.

But the levies in place have created uncertainty for Canadian autoworkers.

Carney, who met with Trump in Washington last week to advance trade talks, has expressed optimism about the prospects for a deal to cut tariffs in certain sectors such as aluminum, but a breakthrough on autos appears less promising.

Reacting to the Stellantis announcement, Carney said the company’s decision was “a direct consequence of current US tariffs”.

He said his government would continue to prioritize investments “that will transform our economy from being overly reliant on our largest trade partner [the US]”.

Rafael Gomez, an industrial relations experts at the University of Toronto, told AFP that Canada needs to be prepared for a steady loss of auto assembly jobs over the coming years.

Trump will not relent on tariffs designed to ensure more cars are made in the US, Gomez said.

“Think of the photo op – cutting a ribbon in front of the first new Jeep made in Illinois in years,” he added.

Canada should prioritize being an essential provider of auto parts to serve US assembly plants, Gomez said.

Stellantis told AFP it remains committed to Canada.

“We have been in Canada for over 100 years, and we are investing,” the company said in a statement.

“We have plans for Brampton and will share them upon further discussions with the Canadian government.”

Nature loss and biodiversity decline are a growing challenge for multiple business sectors and have given rise to new regulatory efforts to reverse these trends. One example is the new UK biodiversity net gain (BNG) legislation, which requires developers in England to enhance habitats and achieve a 10% increase in biodiversity over 30 years, making it a central element of property development. 

This regulation introduces long-term risks not only for developers but also for a wide range of professionals — including architects, surveyors, design specialists, engineers, and planners — who are either directly exposed to BNG-related risks or depend on others involved in these projects. 

BNG implementation 

The BNG regulation requires developers to submit a biodiversity gain plan approved before construction begins (definitions can be found here). Developers can achieve BNG — also called the biodiversity gain hierarchy in Article 37A of the regulations — in three ways: 

1. Onsite within the red line boundary of a development site. 
2. Offsite biodiversity gains, if onsite is not possible. Developers can either make offsite biodiversity gains on their land outside the development site or buy offsite biodiversity units on the market.
3. As a last resort, through statutory biodiversity credits bought from the government. 

Developers can combine all three options to reach a 10% BNG, but must follow the steps in sequence, with onsite solutions often being the preferred approach. In many cases, reducing the hardstanding areas of buildings to create more fallow land for biodiversity projects proves to be the most cost-effective method to achieve BNG goals. Additionally, green roofs and other biodiversity measures are being integrated into buildings, fulfilling compliance requirements and adding value for owners and occupants.

Achieving BNG onsite is widely regarded as providing more control over biodiversity contributions and compliance, thereby reducing liability risks. In contrast, transferring BNG obligations offsite shifts both control and liability to the third party responsible for managing that project, which can create uncertainties that are difficult to manage.

BNG’s potential role in flood risk management

One opportunity for achieving BNG offsite could be through nature-based flood risk management initiatives, with some local authorities looking at whether BNG credits could be used as funding for flood resilience schemes (BNG guidelines for local planning authorities can be found here). For example, in Hull — an area severely affected by flooding in 2007 — a network of ponds has been created to protect homes and businesses in flood-prone zones. These ponds provide flood protection, enhance biodiversity, and create valuable community green spaces. There is ongoing research on whether BNG credits could be used as a funding mechanism to support this and similar projects.

Risks associated with BNG compliance

Whether biodiversity goals are achieved onsite or offsite, developers and professionals involved in these projects face a range of BNG risks. 

A principal risk is compliance: failing to achieve the mandated 10% biodiversity net gain can result in financial penalties and reputational harm. For example, a five-year-old green roof in central London was underperforming after the original developer sold it. In another case, incorrect species were planted as part of a BNG project and had to be removed and replaced. 

These examples highlight the need for long-term commitment from the entire supply chain to ensure project sustainability and, crucially, an understanding of how this will be monitored. However, it is important to note that areas dedicated to biodiversity can become more ecologically diverse over time as habitats become established. Therefore, it may be the case that many BNG projects actually exceed their 10% target.

Additionally, there is currently a shortage of skilled ecologists in the UK, which can lead to operational risks. These professionals are often essential for conducting baseline surveys and habitat assessments critical to BNG compliance. Without timely access to qualified ecologists, site surveys may be delayed, potentially pushing back project start dates and disrupting overall planning.

Insurance considerations

The role of risk transfer in addressing biodiversity-related risks is increasing, accompanied by the emergence of new products. Long-established insurance solutions — such as environmental impairment liability (EIL), directors and officers (D&O), and business interruption (BI) insurance — already help corporates address nature-related vulnerabilities by covering loss events typically excluded by traditional policies. 

In addition, parametric insurance solutions have been developed to augment EIL and BI products by complementing their limits and exclusions. Technological innovations, such as remote sensing and advanced modelling, enable insurers to expand cover to new types of risks. Recent innovations are designed to help businesses manage nature loss risks, build resilience to climate physical risks, and mitigate the impacts of climate transition risks by de-risking decarbonisation efforts. 

Comprehensive insurance coverage is essential to protect against potential claims arising from failures or inaccuracies in delivering BNG. Ecologists and environmental consultants are expected to play an increasingly significant role in BNG compliance, and although many have not traditionally held professional indemnity (PI) insurance, this may change in the future. 

It is advisable to verify the PI coverage of all stakeholders involved in a project, with the level of insurance typically reflecting the project’s scale. Additionally, clear contractual arrangements providing clarity over the scope and limitations of a professional’s involvement are vital, particularly given the 30-year maintenance commitment associated with BNG projects. And while the exact financial penalties for non-compliance remain uncertain at present, they could increase over time.

For more information on BNG, please contact your Marsh risk advisor.

News highlights:

• Strategic partnership aligns Arm’s leadership in power-efficient compute with Meta’s innovation in infrastructure, AI products and open technologies, to enable richer, more accessible AI experiences for billions of people worldwide
• Meta’s foundational AI software technologies – including PyTorch – now optimized for Arm, including PyTorch’s Executorch runtime using Arm KleidiAI to maximize performance-per-watt for Meta and the global open source community

Arm and Meta have announced a strategic partnership to scale AI efficiency across every layer of compute – spanning AI software and data center infrastructure – to enable richer user experiences to billions of people worldwide. From milliwatt-scale devices powering on-device intelligence to megawatt-scale systems training the world’s most advanced AI models, the collaboration will enable AI across multiple types of compute, workload, and experiences that power Meta’s global platforms.

The multi-year partnership builds on the ongoing hardware and software co-design efforts between the two companies, combining Arm’s leadership in power-efficient AI compute with Meta’s innovation in AI-driven products, infrastructure, and open technologies to achieve significant performance and efficiency gains.

“From the experiences on our platforms to the devices we build, AI is transforming how people connect and create. Partnering with Arm enables us to efficiently scale that innovation to the more than 3 billion people who use Meta’s apps and technologies.” Santosh Janardhan, Head of Infrastructure, Meta

“AI’s next era will be defined by delivering efficiency at scale. Partnering with Meta, we’re uniting Arm’s performance-per-watt leadership with Meta’s AI innovation to bring smarter, more efficient intelligence everywhere — from milliwatts to megawatts.” Rene Haas, CEO, Arm 

Scaling AI in the Cloud

Meta’s AI ranking and recommendation systems – which power discovery and personalization across Meta’s family of apps, including Facebook and Instagram – will leverage Arm’s Neoverse-based data center platforms to deliver higher performance and lower power consumption compared to x86 systems. Across its infrastructure, Arm Neoverse will also allow Meta to achieve performance-per-watt parity – underscoring the efficiency and scalability of Arm compute at hyperscale.

The companies worked closely to optimize Meta’s AI infrastructure software stack – from compilers and libraries to major AI frameworks – for Arm architectures. This includes the joint tuning of open source components, such as Facebook GEneral Matrix Multiplication (FBGEMM) and PyTorch, exploiting Arm’s vector extensions and performance libraries, producing measurable gains in inference efficiency and throughput. These optimizations are being contributed back to the open source community, to broaden their impact across the global AI ecosystem.

Accelerating AI Software from Cloud to Edge

The partnership also deepens the collaboration on AI software optimizations across the PyTorch machine learning framework, the ExecuTorch edge-inference runtime engine, and the vLLM datacenter-inference engine, and looks to further improve on the foundation of Executorch now optimized with Arm KleidiAI, improving efficiency on billions of devices. Jointly, the collaboration will accelerate the ease of model deployment and increase performance of AI applications from edge to cloud.

These open source technology projects are central to Meta’s AI strategy – enabling the development and deployment of everything from recommendations to conversational intelligence. Both companies intend to continue extending future optimizations to these open source projects, enabling millions of developers worldwide to build and deploy efficient AI everywhere on Arm. 

Driving the Future of AI Everywhere, Together

From megawatt-scale data centers to foundational AI software, the Arm — Meta partnership is a full-stack collaboration scaling AI across every layer of compute — delivering the next era of intelligent, efficient, and connected experiences to billions worldwide.

Any re-use permitted for informational and non-commercial or personal use only.

The Takeaway

On October 9, Beijing unveiled sweeping new export controls on rare earths and related technologies, marking a major escalation in its use of critical minerals as a geopolitical tool. The move tightens China’s grip on the supply chains that underpin global defence and advanced manufacturing. 

In response, the U.S. and its allies — including Canada — are accelerating efforts to diversify supply, while acknowledging that rebuilding capacity elsewhere will be slow, costly, and uncertain. As both sides harden their positions, the U.S.–China tech and trade confrontation is poised to persist. 
 

In Brief

• Rare earths are vital to a wide range of products, ranging from smartphones and electric vehicles to wind turbines and missile guidance systems. In 2024, China accounted for at least 60 per cent of the world’s total rare earth production and processed nearly 90 per cent of the world’s supply.
   
• Beijing’s new curbs expand restrictions to five additional rare-earth metals, on top of the seven announced in April, now covering nearly all of the recognized 17 rare-earth elements. 
• Under the new rule, foreign companies, even if no Chinese parties involved, must secure Beijing’s approval to export goods containing 0.1 per cent or more by value of certain Chinese-sourced rare earths, or products made using China’s rare earth-related technologies.
   
• Beijing will not allow the export of rare earth materials used in the defence sector, citing concerns over dual-use technologies. Case-by-case approval will also be required for exports involving rare earths used in highly advanced technologies, such as semiconductor equipment and artificial intelligence with potential military applications.
   
• Responding to Beijing’s latest curbs, U.S. President Donald Trump announced an additional 100 per cent tariff on Chinese goods and new export controls on “any and all critical software,” effective November 1, after accusing China of taking an “extraordinarily aggressive” stance on trade and holding the world “captive.”

 

Implications

The new regulations mark a sharp escalation in Beijing’s willingness to weaponize its dominance in rare earths. Mirroring Washington’s semiconductor export bans, which restrict foreign chipmakers from selling products to China if they are made with U.S. technology, Beijing has, for the first time, extended its export restrictions to producers outside China. Compared with the April measures that focused mainly on upstream raw materials, the new rules broadened to cover midstream and downstream manufacturing materials and technologies.

For foreign companies reliant on Chinese machinery, components, or technical know-how, the fallout could be severe. Even firms that already possess Chinese-made equipment risk losing access to maintenance services or spare parts, jeopardizing production continuity. Over the past two decades, China has entrenched its dominance in the sector, supplying nearly all the precision machinery and technical expertise required for rare earth processing worldwide. This new legal tool allows Beijing to constrain Western efforts to build self-sufficient and resilient rare earth supply chains.

China’s latest move poses major challenges for the West’s advanced manufacturing sector — particularly in defence and semiconductors. Rare earths are critical to defence technologies such as fighter jets, missiles, and radar systems. The U.S. still relies on China for about 70 per cent of its rare earth supply. With Beijing’s outright ban on rare earth exports for military use, analysts warn that the U.S. defence industry could take a major hit, hindering Washington’s ability to keep pace with China’s rapidly expanding defence production, which is reportedly scaling up five to six times faster than the U.S.’s own production.

The case-by-case review process also hands Beijing a regulatory lever over global supply chains. Technology manufacturers seeking to use Chinese materials and technology must now disclose who will use them and for what purpose, giving Beijing greater power to withhold or condition approvals. This mechanism adds a layer of strategic intelligence and supply-chain control for chipmakers globally, especially those in Japan, South Korea, and Taiwan. If enforced aggressively, the new rule could delay production of some advanced chips by three to six months, according to industry estimates.

What’s Next

1. The U.S.–China tit-for-tat trudges along
Since U.S.–China trade talks in Madrid in September, both sides have rolled out successive rounds of sanctions and export control measures: Washington expanded export control lists to more Chinese companies and imposed port fees on China-linked vessels, while Beijing blacklisted several U.S. drone firms. Just days before China’s new rare-earth measures, a U.S. congressional committee urged tighter export curbs on chipmaking equipment to limit Chinese access. Analysts expect further “twists and turns” ahead. Even if Chinese President Xi Jinping and Trump meet at the October APEC Summit in South Korea, few anticipate major concessions, though Beijing’s new controls may offer Xi added leverage.

2. The West, including Canada, continues to accelerate rare-earth reshoring

Spurred by China’s weaponization of rare earths, Western governments in recent years have been ramping up efforts to rebuild domestic supply chains. Through its 2022 Critical Minerals Strategy, Ottawa committed C$3.8 billion to accelerate domestic production and processing, with the Saskatchewan Research Council developing refining capacity could supply the U.S. defense sector. The U.S. One Big Beautiful Bill Act provided US$7 billion to boost critical mineral production through 2029, while Japan recently pledged a US$120 million investment toward a French rare-earth refining project to secure alternative sources. Australia is also developing a US$780 million critical minerals reserve that will prioritize future production sales to allies.  Meanwhile, the Trump administration has purchased a stake in two Canadian critical mineral companies to secure domestic supply, including one worth up to US$35.6 million.

China’s tightening controls are likely to further strengthen these diversification drives, though reshoring remains capital-intensive and technologically challenging.

• Edited by Vina Nadjibulla, Vice-President Research & Strategy, and Ted Fraser, Senior Editor, APF Canada