Highlights
- China’s MOFCOM suspends export controls on 28 U.S. entities for 90 days.
- Maintains discretionary control over rare earth and advanced material exports.
- The suspension is a calculated diplomatic maneuver.
- Testing U.S. willingness to compromise on technology and trade restrictions.
- U.S. companies must use this temporary window to diversify rare earth supply chains.
- Reduce dependency on Chinese materials.
In a striking move with broad implications for the global high-tech and critical minerals supply chain, China’s Ministry of Commerce (MOFCOM) (opens in a new tab) has temporarily suspended export controls targeting 28 U.S. entities for dual-use items—materials and technologies with both civilian and military applications. The 90-day suspension follows joint statements made during the China-U.S. trade talks in Geneva, suggesting a tactical thaw in escalating bilateral tensions.
This rollback, outlined in MOFCOM Announcements No. 21 and No. 22 from April, originally imposed export prohibitions on U.S. defense contractors, semiconductor manufacturers, and aerospace firms by denying access to China’s vast ecosystem of rare earths, permanent magnets, advanced alloys, and other dual-use materials. The sudden moratorium signals not capitulation, but strategic calibration by Beijing, timed to reinforce a narrative of diplomatic “reciprocity” while keeping regulatory levers intact.
The move was announced by MOFCOM and noted in Global Times (opens in a new tab), a daily tabloid newspaper owned by the People’s Daily Press, which operates under the Central Committee of the Chinese Communist Party (CCP)
Implications for Rare Earth Supply Chains and National Security
The 90-day grace period opens a narrow window for U.S. companies—many deeply reliant on Chinese rare earths and related advanced materials—to shore up supply chains, renegotiate contracts, and lobby for more permanent exemptions. However, under the PRC’s Export Control Law, Chinese authorities have retained full discretionary control over export licenses. Each shipment must still clear a case-by-case permit process, preserving China’s leverage while offering the illusion of compromise.
This is not détente. It’s a calculated risk-balancing act.
Key sectors affected include:
- Semiconductors (e.g., GaN, SiC materials),
- Aerospace alloys,
- Magnet manufacturing for defense and EVs (NdFeB, SmCo),
- Telecom and satellite components.
The real message to Washington? Beijing still controls the tap.
Strategic Outlook
The Geneva trade dialogue may have yielded “consensus,” but the export control suspension is neither unconditional nor permanent. China’s move should be seen as a conditional de-escalation—a test of the U.S. willingness to compromise on tariffs, tech sanctions, and chip restrictions. The ball is now in Washington’s court.
The reprieve underscores the urgent need for U.S. strategic planners to accelerate rare earth diversification strategies—whether through allied partnerships (e.g., Australia, Canada), domestic mine-to-magnet investment (e.g., MP Materials, Energy Fuels), or defense stockpiling.
Bottom Line
This temporary export control pause is less an olive branch than a pressure valve release. The rare earth squeeze may be delayed, but not defused. U.S. policymakers, investors, and supply chain managers should treat this 90-day window as a countdown, not a reset. It’s time to build resilient supply chains in the West!
Discuss the implications at the Rare Earth Exchanges (REEx) Forum (opens in a new tab).
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