Highlights
- China suspends export restrictions for 28 U.S. companies
- Maintains export ban on seven critical rare earth elements
- The selective trade détente reflects Beijing’s strategic approach to maintaining leverage in global mineral supply chains
- U.S. remains vulnerable, importing over 70% of rare earths from China despite temporary trade reprieve
In a strategic but partial trade détente, China has suspended export restrictions on dual-use items for 28 American companies and removed 17 entities from its “unreliable” list as cited by Rare Earth Exchanges (REEx)—yet notably maintains its export ban on seven critical rare earth elements (REEs), underscoring their geopolitical value amid deepening U.S.-China tensions.
Announced just days after U.S. Treasury Secretary Scott Bessent met with Chinese Vice Premier He Lifeng in Geneva, the 90-day export reprieve reflects incremental progress in thawing bilateral economic relations. However, the continued ban on select REEs—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—signals that Beijing is not loosening its grip on one of its most powerful bargaining chips, according to CNBC (opens in a new tab).
These rare earths are essential for American defense systems, electric vehicles, energy infrastructure, and advanced electronics. Their absence from China’s list of lifted countermeasures suggests that Beijing intends to retain strategic leverage over U.S. industry and military readiness. The original export restrictions, imposed April 4 in retaliation for President Trump’s sweeping “Liberation Day” tariffs, remain in full force for these materials.
Adding to the tension, China’s Commerce Ministry simultaneously released a statement emphasizing the importance of rare earth controls for national security. “Comprehensive control of strategic minerals is essential,” the statement reads, citing broad inter-agency support for tighter government oversight. This was paired with new efforts to crack down on smuggling, further centralizing China’s grip over global rare earth flows.
Meanwhile, messaging from state-linked social media channels like Yuyuantantian, tied to CCTV, broadcast pointed questions about the impact of REE shortages on American defense capabilities—an unmistakable signal that China sees rare earths not just as commodities but as strategic levers in a high-stakes geopolitical chess game.
Analysis: Leverage Maintained, Not Relinquished
While the optics of easing some trade barriers may offer a temporary balm for markets and manufacturers, the refusal to lift REE export restrictions sends a stark message: China will not relinquish its dominance in critical mineral supply chains without concrete concessions. The U.S. imports over 70% of its rare earths from China. Without rapid investment in alternative sources, such as new domestic processing hubs or partnerships with allies like Australia and Canada, the United States remains exposed.
The 90-day window offers a narrow opportunity for the U.S. to recalibrate, but without parallel rare earth supply chain development, it remains vulnerable to China’s resource nationalism. Beijing’s selective easing and simultaneous doubling down on REE control highlights a sophisticated strategy: maintain global diplomatic flexibility while consolidating mineral power.
For ongoing updates, analysis, and REE industry insights, see Rare Earth Exchanges as well as the Forum (opens in a new tab).
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