Highlights

• China's August rare earth exports hit 6,146 tons.
• US shipments fell by 5%.
• Other regions experienced an increased supply.
• Western countries struggle to replace Chinese rare earth magnet production.
• Western countries consume 40,000 tons annually but produce less than 2,000 tons outside Asia.
• Strategic export patterns demonstrate Beijing's ability to use rare earth flows as both a market signal and political instrument against US trade dynamics.

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Customs data out of Beijing has revealed a telling split in the rare earth trade. In August, China’s rare earths exports to the United States fell 5% to 590 tons, even as total overseas shipments climbed to 6,146 tons — the highest monthly tally since January. The figures underscore how China is calibrating its leverage: tightening in one direction, loosening in another, while reminding the world of its near-total dominance in rare earth magnets.

A Lever in Trade Tensions

The numbers landed just a day after a phone call between former President Donald Trump and Chinese leader Xi Jinping, with rare earths once again part of the broader chessboard of tariffs, sanctions, and industrial policy. Beijing had already demonstrated its hand earlier this year by halting shipments of certain high-strength magnets, forcing global industries to scramble. Aircraft parts, EV motors, and military platforms all rely on these inputs — and Washington knows it.

Even as China eased restrictions in recent months, the U.S. has clearly been singled out for pressure. Europe, by contrast, saw supplies rise — capped by Neo Performance Materials (opens in a new tab) opening a major new factory in Estonia that nearly doubled the continent’s magnet-making capacity.

Outside China: Racing but Lagging

Despite ambitious projects, the West is still far from replacing Chinese capacity. According to Adamas Intelligence (opens in a new tab), North America and Europe together consume about 40,000 tons of magnets annually but produce less than 2,000 tons outside Asia. Japan and Vietnam add another 25,000 tons, mainly for regional automakers. China dwarfs all of this with more than 200,000 tons each year, much of it tied into its own manufacturing exports.

MP Materials (opens in a new tab), the sole U.S. rare earth miner, is building a magnet plant in Texas that will initially produce 1,000 tons annually for General Motors, with expansion plans up to 10,000 tons. The Pentagon recently injected $400 million into that effort. Meanwhile, USA Rare Earths (opens in a new tab) is scaling its Stillwater, Oklahoma, facility to 600 tons by late 2026, and Noveon Magnetics (opens in a new tab) has completed a plant near Austin, Texas. These are real steps — but together, they remain a fraction of the demand.

Strategic Patterns

The August export data confirms what industry insiders have long argued: Beijing wields rare earth flows as both market signal and political instrument. Shipments to the U.S. contract while overall exports expand, showcasing selective restraint that keeps pressure on Washington while allowing China to preserve its role as a global supplier.

For buyers in North America and Europe, the message is clear: new plants are critical, but time is the real bottleneck. China still controls the pace of the global magnet economy, and catching up requires not just capital but years of steady execution.

Source: “China’s rare-earth shipments to the US slip while overall exports increase,” Cryptopolitan, September 20, 2025.

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