China Bans Dual-Use Exports to 14 EU Companies Including Rheinmetall in Retaliation for Sanctions

China's Ministry of Commerce announced on July 27, 2026, a ban on further shipments of dual-use materials or products to 14 EU companies. The list includes Germany's largest defense contractor Rheinmetall, German company Sindhauser Materials, and Italy's Rafat Group. Rheinmetall has played a central role in Germany's rearmament efforts following Russia's full-scale invasion of Ukraine, and its military equipment requires tungsten and rare earths. Sindhauser Materials produces yttrium alloys containing zirconium, used in advanced semiconductors. Rafat Group is Europe's leading manufacturer of custom electric motors, which contain powerful rare earth magnets inside. China stated that this action is in response to the EU's earlier sanctions on 14 Chinese and Hong Kong companies related to Russia's war in Ukraine. The EU had previously stated that these companies belong to or support the Russian military-industrial complex. Over the past 16 months, China has used its dominance in rare earth mining and processing as a bargaining chip in economic disputes.

China imposed export restrictions on tungsten, antimony, gallium, and germanium at the end of 2024, on seven rare earth metals in April 2025, and planned to impose restrictions on five more rare earth metals in November. Nearly all global capacity for rare earth metal conversion and alloy production is in China, and many of the European companies targeted on Friday are among the few outside China that possess advanced processing expertise for critical minerals.