China Rare Earth Firms Freeze U.S. Exports Weeks Before Xi-Trump Summit
Despite having secured export licenses, some Chinese rare earth producers have stopped shipping these materials to the United States over fears of repercussions from China's authorities, sources familiar with the development told Reuters.
The renewed standoff in rare earths comes weeks before Chinese President Xi Jinping is expected to visit Washington for a summit with U.S. President Donald Trump at the end of this month.
A few Chinese suppliers have been refusing to export rare earths to the U.S. since the beginning of August, according to Reuters' sources.
That's when China announced is it placing the Responsible Business Alliance (RBA), the organization behind the Responsible Minerals Initiative (RMI) and its RMAP assessments, together with the labor rights organization Verité, on its countermeasure list.
The Chinese rare earth firms are wary of being punished by China for complying with the RMI guidance and due diligence procedures, one of Reuters' sources said.
Other firms from China have been avoiding rare earths exports to the U.S. despite having licenses because they have preferred not to be entangled in the geopolitics and unpredictable trade behavior of the two rivals.
Despite improvements in some areas, such as targeted policies and investment support for rare earth supply chains outside China, the global critical minerals market remains heavily concentrated in leading suppliers, with China being the leader in the mining and refining of many of the metals, International Energy Agency said in a July report.
The global critical minerals market remains highly concentrated, and new threats to supply security have emerged in recent months as China has curbed exports of some rare earth elements, the IEA said.
The Chinese government introduced major export controls on heavy rare earth elements last year.
Although further expanded controls have been suspended until November 2026, their full implementation – if China decides to go through with it – could put an estimated $6.5 trillion per year of downstream production outside China at risk across the automotive, high-tech, defense, and energy sectors, the IEA said in its annual Global Critical Minerals Outlook 2026 report in July.
By Charles Kennedy for Oilprice.com
China rare earth firms halt some US shipments over geopolitical worries, sources say
Some Chinese rare earth suppliers are declining to ship to the U.S. for fear of repercussions from Beijing, three sources said, underscoring how access to the materials remains an issue for the U.S. weeks before President Xi Jinping visits Washington.
U.S. officials have repeatedly asked China to stick to commitments made in Busan and Beijing over the past year to ensure the smooth flow of rare earth export licences. The persistence of the problem has put it on the U.S. planning agenda ahead of Xi’s September 24 visit, a source familiar with the work said.
A handful of Chinese suppliers have refused to ship rare earths to U.S. companies since early August when China imposed sanctions on the Responsible Business Alliance (RBA), a U.S. supply chain monitor, a separate source with direct knowledge of the situation said.
With China deploying its own trade compliance weapons, the companies were wary of punishment from Beijing for complying with the due diligence framework of the Responsible Minerals Initiative (RMI), a global mineral supply chain audit programme connected with the RBA, the source said.
Other Chinese rare earths companies had already stopped shipments to the U.S. to avoid entanglement in geopolitics in recent months, two other sources familiar with the trade said. One cited four instances where Chinese firms declined to send material for fear it could be resold to banned users.
The sources declined to be named given the issue’s sensitivity.
Reuters was unable to determine the total number of Chinese suppliers who had refused to move shipments destined for U.S. clients.
A U.S. official speaking on condition of anonymity told Reuters that the administration continues to press Chinese counterparts to address China’s lack of compliance with the Busan agreement, as well as other bilateral concerns.
Tight supply
While exports of many rare earths or related magnets have rebounded since China imposed restrictions in April 2025, the prices ofcertain rare earths and critical materials like yttrium, indium phosphide and tungsten that have military applications or are used in sensitive industries including aerospace or chipmaking remain near record highs with tight supply.
Other industries affected by licence delays include medical devices and energy.
Exports to the U.S. of yttrium have risen this year but are still only about half 2024 levels despite large shipments to other countries, Chinese customs data shows. Some U.S. companies have been waiting more than six months for mineral licences, said two of the sources, declining to identify them.
“China has been very effective in using rare earth export controls to impose restraint on the Commerce Department’s Bureau of Industry and Security,” said Reva Goujon, a geopolitical strategist at Rhodium Group, referring to the U.S. agency responsible for various restrictions targeting China.
“Supply chain chokepoints will come into focus, but I would expect Beijing to loosen up critical raw material controls a bit around the summit to deflate U.S. allegations that Beijing is not upholding the Busan truce,” Goujon added.
The U.S. Treasury, the U.S. Trade Representative, State Department and China’s ministry of commerce did not respond to requests for comment.
China’s ministry of foreign affairs said China was committed to maintaining global critical mineral supply chains.
Beijing said its August decision to sanction the RBA and other U.S. auditing firms was a response to a series of FCC restrictions since December targeting Chinese electronics testing labs, drones, consumer routers, submarine cables, advanced robotics equipment and power inverters.
When U.S. officials have raised the rare earths issue in meetings, Chinese officials countered by saying the FCC actions were a violation of the Busan truce, said one of the sources who was briefed on the interaction.
However, after two months without yttrium exports, China sent 27 tons of the material to the U.S. in July, the second-highest monthly shipment since January 2025.
Several U.S. firms also report recently receiving multiple licences after long waits, two sources said, with some firms anticipating an increase in approvals around the summit.
Licence approvals are even more limited for Indian and Japanese buyers, two sources familiar with the matter said. Chinese suppliers are overwhelmingly refraining from shipping material to Japanese firms, one of them said.
Japan’s Trade Minister Ryosei Akazawa has previously said Japanese companies have faced delays in permits and prolonged customs inspections for critical minerals including rare earths. His ministry did not immediately respond to a request for comment on Friday
China exported no terbium to Japan between January and August of this year, from 20 tons over the same months last year. Gallium shipments were 65% down in the same period, while yttrium was down 98%, Chinese customs data showed. Gallium and terbium are used in small amounts to make high performance rare earth magnets.
“While processes have been streamlined, our member companies still face issues with implementation,” the European Chamber of Commerce in China told Reuters in a statement. “What our members would like to see is a commitment to implement a transparent and predictable application process that provides reliable access to rare earth elements.”
(By Laurie Chen and Lewis Jackson in Beijing, Solomon Cefai in Singapore and Trevor Hunnicutt in Washington DC; Additional reporting by Kevin Krolicki in Beijing and Kentaro Okasuka in Tokyo; Editing by Kate Mayberry)
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