China Tightens Rare Earth Leverage as Export Value Plunges Ahead of U.S. Talks

Highlights

• China’s May trade data reveals a 48.3% year-on-year decline in rare earth export values.
• Export volume remains stable, suggesting deliberate strategic market intervention.
• China demonstrates geopolitical leverage through control of critical mineral supply chains.

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Newly released May trade data from China’s General Administration of Customs reveals a sharp 48.3% year-on-year drop in the value of China’s rare earth exports, underscoring how Beijing is actively wielding its dominance over critical mineral supply chains as a geopolitical tool ahead of upcoming U.S.-China trade negotiations.

According to South China Morning Post, (opens in a new tab) In May, China exported 5,864.6 tonnes of rare earth elements valued at US$18.7 million, down from US$21.7 million in April and representing a 13.7% month-on-month value decline. While total export volumes for the first five months of 2025 are slightly up (+2.3% year-on-year), the dramatic drop in value signals deliberate pricing or compositional controls rather than a broad collapse in demand.

Talks between the Chinese and Americans occurred today in London.

Analysts say the message is clear: China retains decisive leverage in the global rare earth supply chain and is prepared to deploy that leverage strategically. “Usually, it’s the guy with the sought-after resource who has leverage,” said Charles Chang (opens in a new tab) of Fudan University, emphasizing the asymmetric power China holds through its control of refining and separation capabilities.

For U.S. policymakers and allied buyers, this serves as a renewed warning. Even with new mines coming online in Australia, Canada, and the U.S., China’s ability to restrict market-ready REE exports—including magnet-grade oxides—remains a potent pressure point. The fact that exports are declining in value faster than volume suggests targeted export curbs or shifts in product mix, a pattern consistent with past Chinese market interventions.

Rare Earth Exchanges continues to track China’s evolving trade behavior and its implications for Western diversification efforts, pricing stability, and long-term supply resilience.