PARIS — China has broken international trade law by restricting the export of rare earth elements and other metals crucial to modern manufacturing, a World Trade Organization panel said Wednesday. That conclusion opens the possibility that Beijing will face trade sanctions from the United States, which initially brought the case, the European Union and Japan.

Members of a W.T.O. panel considering the case in Geneva found that the export taxes, quotas and bureaucratic delays Beijing imposes on overseas sales of the minerals artificially raise prices and create shortages for foreign buyers. The panel concluded that “China’s export quotas were designed to achieve industrial policy goals” rather than to protect its environment, as Beijing had argued.

China produces more than nine-tenths of the global supply of the strategically important metals, which are essential to many modern applications including smartphones, wind turbines, industrial catalysts and high-tech magnets. Prices soared in 2010 after Beijing cut export quotas by about 40 percent, to just over 30,000 tons, saying the restrictions were necessary because mining rare earths creates many environmental hazards.

United States and European officials hailed the ruling. Michael B. Froman, the United States trade representative, said the restrictions had bolstered Chinese industry at the expense of businesses in other countries, forcing them “to pay as much as three times more than what their Chinese competitors pay for the exact same rare earths.”