China suspends rare-earth export control measures, easing key flashpoint in US-China trade war — one-year reprieve allows for trade talks with the U.S. to continue

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Softer stance will reduce the pressure on the trade negotiations between the U.S. and China.

Lynas Rare Earth
(Image credit: Lynas Rare Earth)

Beijing just announced that it will suspend the expanded rare-earth export controls it announced in early October. The Chinese Ministry of Commerce (MOFCOM) and the General Administration of Customs said that it will delay its implementation for a year, according to a report from Digitimes. The original expanded rule covers China-sourced rare-earth minerals, as well as any technology in which these materials account for at least 0.1% of the item’s value.

The suspension will give companies that rely on these resources and components some breathing room to stockpile them and find alternative sources. It will also reduce the pressure at the negotiating table, as bureaucrats will have more time to iron out agreements between their rivals without pressure from the top to get something hammered out fast.

Although MOFCOM did not state why it’s delaying the implementation of these export controls, it comes a little over a week after U.S. President Donald Trump and Chinese President Xi Jinping agreed on a tariff truce. The two world leaders met in Busan, along the sidelines of the 2025 APEC Summit in South Korea, where they held a two-hour closed-door meeting. Before this, Trump responded to Beijing’s expanded export controls by threatening a 100% import duty on Chinese goods, as well as a complete ban on critical software, which could have been more devastating than additional taxes.

This will likely be a blow to the world’s most valuable company, especially as its China market share has essentially fallen to zero from a high of 95% just a few years ago. While other experts argue that giving the United States' biggest rival in the AI race the latest hardware will only be to its own detriment, Huang contends that the spread of U.S. chips is vital for Washington to retain its competitive advantage, especially in a country that is estimated to have about half of the world’s AI developers in its talent pool. However, Huang's position as the chief of the biggest AI chip manufacturer means that he will also benefit from Nvidia’s sales to both the U.S. and China, as the two rivals race for global AI supremacy.

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Jowi Morales
Jowi Morales
Contributing Writer

Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.

6 Comments Comment from the forums
  • twin_savage
    Moxylite said:
    Production of F-35 fighter jets, Virginia- and Columbia-class submarines, Tomahawk missiles, advanced radar systems, Predator unmanned aerial vehicles, and the Joint Direct Attack Munition series of smart bombs would cease.
    What makes you think that?
    The REEs that go into all of these are DFARS and thus locally or designated friendly nation produced... even if that wasn't true the US has a strategic reserve of REEs that would last for many decades or hundreds of years IF only used for defense articles.

    Moxylite said:
    An Arleigh Burke-class DDG-51 destroyer requires approximately 5,200 pounds, while a Virginia-class submarine uses around 9,200 pounds.
    Keep in mind that these are "rare earth materials" content figures are from a DoD REE recycling feasibility paper that is only taking into account materials with REEs in them, not the REE content of the materials themselves.
    Reply
  • Moxylite
    @twin_savageWith all due respect, the .gov says the opposite. Could you please show where we have decades worth stockpiled? Untapped prospecting in a national park?

    GovInfogovinfo.gov\203a content \203a pkg \203a BILLS-112hr1388ih \203a html \203a BILLS-112hr1388ih.htmGovinfo
    (5) Furthermore, the United States has limited rare earth production, remains nearly entirely dependent on overseas refineries for further elemental and alloy processing, and does not currently maintain a strategic reserve of rare earth compounds, metals, or alloys.
    Reversal of Fortune | The American Legion
    That last item is crucial, given that the United States does not currently maintain a strategic reserve of rare-earth compounds, metals or alloys. That needs to change.

    America’s Critical Strategic Vulnerability: Rare Earth Elements - Foreign Policy Research Institute In the event of a critical minerals embargo, U.S. companies would be left stranded with limited REE stockpile capabilities.
    Reply
  • twin_savage
    Moxylite said:
    (5) Furthermore, the United States has limited rare earth production, remains nearly entirely dependent on overseas refineries for further elemental and alloy processing, and does not currently maintain a strategic reserve of rare earth compounds, metals, or alloys.
    These findings must not have had purview over the NDS which explicitly states that they stockpile REEs.
    I assume the exact contents of it are classified but you can read more about it here:
    https://rareearthexchanges.com/news/u-s-heavy-rare-earth-stockpiles-under-strain-amid-chinas-export-curbs/
    This article is heavily colored by financial interests that want mining and refining vastly expanded so they claim the US would run out of some specific worse case REEs within months if totally cut off. I'm fairly certain the article is making the same rare earth material versus rare earth material rare earth content mistake as past articles to come to that conclusion, as well as using "some sources" for the stockpile level of the specific REE in question rather than official figures that they are presumably not allowed access to.

    At any rate when I say the US has a reserve I'm mostly talking about the private companies REE reserves.
    Remember when TSMC said that they would virtually not be affected by China's REE embargo:
    https://www.tomshardware.com/tech-industry/manufacturing/tsmc-says-chinas-rare-earth-export-restrictions-will-have-limited-short-term-impact-on-company-concern-lies-in-transitioning-away-from-china-supply
    Defense contractors are like that on steroids.
    Reply
  • Moxylite
    @twin_savage Cool (y) thanks for clarification! The separation between Gov & private corps are quite convoluted nowadays. Thanks again @ twin_savage
    Reply
  • twin_savage
    Moxylite said:
    The separation between Gov & private corps are quite convoluted nowadays.
    Not only is it convoluted but it is opaque as well! 🙃

    I'm super dialed into all this because I'm involved in a project to hopefully supplant NdFeB magnets wherever more performance is needed or cost isn't an issue while using almost no rare earths.
    Investors are throwing money at traditional rare earth magnet replacement initiatives and startups right now, which is attacking part of the "problem" (there are other uses for REE besides magnets. they just aren't as big) from the demand side of the equation.
    Reply
  • urn66
    Hello. Chinese person here. I would like to raise some important points absent from the article and discussion that matter. Please consider:

    Not all REEs are the same. Obviously there are different elements, but there are also different grade of purity, and the higher the purity, the more difficult the refining process. Some nations besides China, such as Japan, do "Light Refining"of selected elements needed for commercial grade magnets needed mainly for automotive and consumer products. The source materials are recycled, or ores/intermediate they buy on the market (typically from Japan).

    Advanced electronics such as semiconductors and avionics (particularly high resolution radar) require much higher purity materials (think log scale), typically in the range of 6N to 9N (N=Zeros to the right of decimal point).

    Only China produces such purity materials at scale, and typically using complex, proprietary processes. China accounts for more than 90% of materials 6N or above. 70% of the raw materials input are from China with 30% are imported from other nations.

    The technology used for this refining took years to develop and build to scale. The low level crude intermediate refining illustrating the story is the starting point, form there is gets high-tech and automated because of technical and environmental demands (along the way a lot of heavy metals and radioactive materials are extracted).

    Additionally, the processes have certain power demands, not to mention various reagent and organic media (some proprietary) demands. A lot of raw materials, reagents and power in, very little pure materials out.

    It is a complex and troublesome business for not a lot of profit. Not something American of European companies want to do, so you orphaned the industry and dumped it on China. Fast-forward to today, and China modernized and improved the industry (it was very dirty when we started). We also scaled the downstream manufacturing process to make some of the components to earn some money from all that work.

    REEs are a classic "dual-use" material/technology, all of the discussion about military application in this comment thread prove it. Some of those weapons are pointed at China. The more the USA goes off the deep end about war with China, and the more the USA promotes a Cold War with China, the more rational it is for China to regulate exports.

    In fact, it is only when the Trump/Biden/Trump administration cranked-up the technology export restrictions on China to the point of absurdity, and then weaponized trade against China and the world, that China final played this chard because the USA has become a threat. You picked this fight.

    REEs are finite resources.Mining and refining, and recycling have environmental impacts no matter how well they are done. It starts with digging a hole in the ground. Or collecting a lot of used, scrap equipment to recycle, the stuff wealthy nations dump on others to deal with.

    Nothing stops the USA or any other country from jumping into the industry. Mine your lands. Develop your own refining and waste-treatment processes. Invest billions to to scale it up to commercial level. Train your materials scientists (most of your current are recruited from China and India, and get their visas cancelled for thanks).

    Just do it. Should be simple. Just throw money at it, right?
    Reply