Expanded export of uncommon minerals from China occurs despite limitations set by Beijing
In early June 2025, a significant conversation took place between U.S. President Donald Trump and Chinese President Xi Jinping, with the topic of rare earth metal exports being a key discussion point. The decision to halt exports was under consideration due to the newly imposed export restrictions in April.
These exported rare earth metals and magnets now require special export licenses, a system that is still in its infancy, as noted by The New York Times. However, the surge in China's rare earth metal exports in May 2025, despite the export restrictions, can largely be attributed to a combination of trade negotiations and strategic adjustments.
In April 2025, Beijing introduced export restrictions on seven rare earth elements and magnets, requiring exporters to obtain special licenses. This move was primarily a countermeasure to increased U.S. tariffs on these critical minerals. The initial impact of these restrictions was a sharp fall in shipments and supply chain disruptions globally.
However, following these tensions, China and the U.S. reached a new trade agreement in June 2025, which included commitments from Beijing to accelerate rare earth shipments to the U.S. and reduce tariffs mutually for 90 days. This trade framework led to a significant rebound in exports, with shipments to the U.S. rising by 660% from May to June, and total rare earth exports increasing by about 32% from May.
The key reasons behind the export surge include diplomatic resolution and trade agreements between China and the U.S., China's dominant position in the global rare earth supply chain, and acceleration in export license approvals by China’s Commerce Ministry in response to international pressure and trade negotiations.
Despite the initial export restrictions throttling supply due to lengthy licensing requirements, subsequent trade diplomacy and China's market leverage enabled a sharp export rebound by late May and June 2025. It's worth noting that the export restrictions do not cover all types of rare earth metals that China exports.
The increased exports are crucial for industries such as automotive, aerospace, and semiconductor, which heavily rely on these metals and magnets. The U.S. and China agreed to temporarily suspend the implementation of most import tariffs on each other's goods for 90 days on May 12, 2025. More detailed data on the impact of the export restrictions will be available after June 20, 2025.
Business interests led U.S. and Chinese leaders to meet and discuss the exports of rare earth metals, given their significance in technology-driven industries such as automotive, aerospace, and semiconductor. China's strategic adjustments and trade agreements resulted in a surge of rare earth metal exports in May and June 2025, despite the initial export restrictions.
