China’s Rare Earth Retaliation Threatens the Future of Avionics

Global Avionics Round-Up from Aircraft Value News (AVN)

When President Donald Trump launched a trade war with China and imposed sweeping tariffs on Chinese goods, few anticipated the devastating counterpunch that would come from Beijing.

In an aggressive move in mid-April, China—home to more than 80% of the world’s rare earth mineral refining capacity—announced restrictions on the export of key rare earths.

While the move was initially framed as economic retaliation, its shockwaves are now reverberating through one of the world’s most sensitive and technologically advanced sectors: aviation, and more specifically, avionics.

The Rare Earths That Power the Skies

Rare earth elements such as neodymium, dysprosium, terbium, and yttrium might sound obscure, but they are essential to modern avionics. These minerals are used in high-performance magnets, sensors, actuators, gyroscopes, and radar systems that form the backbone of a plane’s electronic brain.

From inertial navigation systems (INS) to heads-up displays (HUDs) and flight management systems (FMS), avionics simply cannot function without a steady supply of these critical materials.

And therein lies the problem: China dominates the global supply chain—not just in mining, but more importantly in refining. Western countries may have rare earth reserves underground, but without the sophisticated processing infrastructure that China has built up over decades, raw ore is useless.

Avionics in the Crosshairs

The aviation industry is especially vulnerable to supply shocks because of the stringent certification, reliability, and performance requirements that avionics systems must meet. Unlike consumer electronics, you can’t simply switch to a lower-grade magnet or cheaper alloy when a key input is in short supply.

Flight-critical systems depend on rare earth-derived components for their precision and durability under extreme conditions, from high G-forces to wide temperature swings.

Flight control computers, GPS receivers, and communication systems all use rare earth-enabled technologies. As China throttles exports, Western avionics manufacturers like Honeywell, Collins Aerospace, and Thales could face production delays, rising costs, and even contract penalties if they can’t deliver on time.

Already, avionics industry insiders are warning of bottlenecks in magnetron and gyro production, which are technologies vital for both civilian aircraft and military platforms.

Military and Defense Implications

The implications for defense aviation are even more severe. Fighter jets, drones, and radar systems rely heavily on rare earths, not only for avionics but also for stealth coatings, electronic warfare, and propulsion systems. If the current restrictions escalate into a full embargo, national security could be compromised.

The Pentagon has flagged rare earth dependency as a strategic vulnerability, and Trump’s trade policy has spotlighted just how exposed the West really is.

While short-term solutions like stockpiling or sourcing from alternative suppliers (such as Australia or Canada) may offer some relief, they won’t solve the core problem: the West is decades behind in rare earth processing and refining.

Policy makers, manufacturers, and defense officials are now considering substantial investment in domestic refining capacity and synthetic alternatives. Without these, the avionics sector risks stagnation, cost inflation, and technological backsliding.

Trump’s tariffs may have been intended to pressure China, but the aviation world is ending up as collateral damage. As China tightens its grip on rare earths, avionics developers are finding themselves caught in a geopolitical tailspin, one that threatens innovation, production, and even the safety of future flight.

This article also appeared in our partner publication, Aircraft Value News.

John Persinos is the editor-in-chief of Aircraft Value News. You can reach him at: jpersinos@acccessintel.com