China’s silver export controls raise alarms for U.S. manufacturers

China will tighten controls on silver exports starting Thursday, extending restrictions on the once-common metal vital to U.S. industry and defense supply chains.

This comes as precious metals were the standout performers among commodities this year, with silver outperforming most major equity indexes and currencies. At the same time, gold reached record highs due to economic and geopolitical risks.

Tesla CEO Elon Musk criticized the move on his social media platform X, responding to a post about the upcoming restrictions. “This is not good. Silver is needed in many industrial processes,” he wrote.

However, the rules are not new. China’s Commerce Ministry first announced the measures in October to strengthen oversight of rare metals, coinciding with a meeting between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea. At that time, Beijing agreed to a one-year pause on certain rare earth export controls, while the U.S. rolled back tariffs.

At the beginning of December, China published a list of 44 companies approved to export silver under the new measures in 2026 and 2027. The 2026 regulations also tightened the export of tungsten and antimony, materials that are dominated by China’s supply chain and are widely used in defense and advanced technologies.

Even though China hasn’t officially imposed a blanket ban on silver exports, the state-run Securities Times said on Tuesday that an unnamed industry insider stated the new policy formally elevates the metal from an ordinary commodity to a strategic material, placing its export controls on the same regulatory footing as those for rare earths.

Precious metals surge as investors flee the weakening U.S. dollar

A November flash survey by the EU Chamber of Commerce in China found that most members have already been, or expect to be, affected by these export restrictions.

In November, the U.S. added silver to its nationally designated list of critical minerals, highlighting its importance in electrical circuits, batteries, solar cells, and anti-bacterial medical instruments. Another U.S. analysis stated that China was one of the world’s largest producers of silver in 2024 and also home to one of the largest silver reserves.

China exported more than 4,600 tons of silver in the first 11 months of the year, significantly exceeding the roughly 220 tons of imports during that period, according to Wind Information, which cited official figures.

The restrictions on silver come just as interest in the metal has increased in recent weeks. Two Chinese firms reached out to Canada-based Kuya Silver on Friday, offering to buy physical silver at about $8 more than the market price at the time, CEO David Stein confirmed. According to him, one company was a manufacturer while the other was a large trading firm.

Stein added that an Indian buyer approached Kuya on Monday with an offer $10 above the market price.

Separately, a column in The Free Press on Tuesday by George Mason University economics professor Tyler Cowen suggested that the surge in silver and gold prices reflects investors moving away from the U.S. dollar.

He called the surge in prices “a flashing warning for the [U.S.] economy.” The U.S. dollar index has plunged by almost 9.5% in 2025, its worst performance in 8 years.

Global buyers offer premiums amid growing silver demand

In comparison, silver has more than doubled in price this year, on track for its strongest annual gain since 1979, when it soared nearly 470%. Prices pulled back on Wednesday after hitting a record above $80 an ounce earlier in the week, with spot silver last trading around $73.

Gold has risen over 60% so far in 2025, also positioning itself for its best year since 1979. Bitcoin, often promoted as a gold alternative, traded near $88,000 Wednesday morning Beijing time, down more than 5% for the year.

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