China's Rare Earth "Bazooka" Wasn't Fired. It Was Aimed

Highlights

• Global Trade Alert found China's rare earth magnet exports hit four-year highs after the 2025 Busan Accord, yet the U.S. received below-average shipments.
• The EU, ASEAN, Japan, and South Korea all received increased or record rare earth supplies, while America saw reduced volumes of key materials including yttrium.
• Trade economist Simon Evenett describes the export pattern as having the 'whiff of divide and rule,' suggesting deliberate geopolitical targeting.
• China demonstrated that rare earth access can be selectively expanded or restricted without a full embargo, creating powerful leverage through ambiguity.
• Investors are warned against two false narratives: that China is cutting off the world, or that rising global exports mean its strategic leverage has disappeared.

A fascinating new report from the Switzerland-based Global Trade Alert (opens in a new tab), authored by renowned trade economist Professor Simon Evenett (opens in a new tab), arrives at a provocative conclusion: China did not cut off the world's rare earth supply after the 2025 Busan Accord. In fact, it exported more rare earth magnets than at any point in the previous four years. Yet one nation stood apart—the United States.

The report examines six months of Chinese export data following the October 2025 Busan Accord, the trade truce negotiated between Presidents Trump and Xi Jinping. Using Chinese customs data, Evenett found global shipments of rare earth metals and magnets generally increased, with dysprosium exports rising nearly fivefold and total magnet exports reaching record levels.

Divide and Rule?

Here is where the story gets interesting.

The European Union received record shipments. ASEAN nations received increased supplies. Japan—despite ongoing political tensions with Beijing—received magnet shipments roughly 50% above its four-year average. South Korea also fared well.

The United States did not.

According to the report, America received no direct shipments of yttrium after Busan, significantly reduced volumes of mixed rare earth metals, and magnet shipments that fell below historical norms. The data led Evenett to describe the pattern as having the "whiff of divide and rule."

Great Powers Era 2.0 Has Arrived

At ™, we have argued that the world entered Great Powers Era 2.0 years ago—a period defined by industrial competition, economic coercion, strategic supply chains, and resource nationalism.

This report provides one of the clearest data-driven examples yet. China did not need to halt exports. It merely demonstrated that access can be adjusted, redirected, delayed, expanded, or restricted depending on geopolitical circumstances. That flexibility itself creates leverage.

The most powerful weapon is often the one that never needs to be fired.

The Investor Takeaway

Evenett's report challenges a common assumption that China's rare earth dominance matters only if Beijing completely cuts off supply.

The evidence suggests something more sophisticated may be emerging: selective economic statecraft. If China can reward compliant partners, pressure rivals, and maintain plausible deniability while keeping global volumes elevated, then rare earths have become something far more potent than industrial inputs. They have become tools of geopolitical influence.

And that may be precisely how economic competition is waged in Great Powers Era 2.0.

The REEx Verdict

Investors should resist two simplistic narratives. The first is that China is cutting off the world. The second is that rising exports mean leverage has disappeared. The data suggest neither is true. China's rare earth dominance remains intact. Global supplies increased. Yet access appears uneven, selective, and subject to political discretion. In that sense, the report's most important conclusion may be its simplest: the rare earth bazooka was not fired. It did not need to be. The ability to aim it may be enough.