GE Aerospace (GE) stock plummeted 5.60% in pre-market trading on Friday, following news that China has imposed export controls on some rare earth metals, directly impacting its recently spun-off healthcare division, GE Healthcare.

The Chinese government announced restrictions on the export of medium and heavy rare-earth metals, including gadolinium, which is crucial for producing contrast agents used in MRI scanners. This development is particularly significant for GE Healthcare, as its imaging segment, which includes MRI machines, accounted for 46% of its total sales in 2024.

The impact on GE Aerospace stock appears to be a ripple effect from the challenges facing GE Healthcare. Investors are likely concerned about the broader implications of China's export controls on the GE group of companies. Additionally, GE Healthcare had already been grappling with declining sales in China, which fell 15% in 2024, and the company expects continued pressure in the region.

This latest development compounds existing challenges for GE Healthcare, which earlier this year warned that its full-year profit would be affected by U.S. tariffs imposed on products from China. As the situation unfolds, investors will be closely watching how GE Aerospace and GE Healthcare navigate these geopolitical and supply chain challenges.