Highlights
- China's rare earth magnet exports jumped 660% in June, though year-to-date exports are still down 19% from 2024.
- Despite export recovery, significant trade tensions persist with U.S. tariffs averaging 53.6% and no permanent trade agreement finalized.
- Ongoing negotiations and symbolic diplomatic gestures suggest potential progress, but systemic fragility in U.S.-China trade remains.
A Reuters article (opens in a new tab) published July 20, 2025, declares a dramatic recovery in China’s rare earth magnet exports to the U.S., reporting a 660% month-on-month spike in June. At first glance, this appears to be stabilization after months of trade tension. However, the numbers warrant a closer examination—because beneath the headlines, the picture remains fragile, fragmented, and potentially misleading.
What’s Accurate?
The raw figures from China’s General Administration of Customs (opens in a new tab) are valid: 353 metric tons of rare earth magnets were exported to the U.S. in June, a sixfold jump from May. The cause—resumption of trade following a bilateral agreement and partial normalization of licensing—is plausible, especially in light of parallel moves, such as Nvidia’s chip access deal with China.
Additionally, it is worth noting that China supplies over 90% of the world’s rare earth magnets and imposed new export restrictions in April, which drove shipments down sharply and caused ripple effects across global EV and wind turbine production.
What’s Missing or Misleading?
First language, such as “surge” or “skyrocket,” masks a rebound from an artificially suppressed base. May’s export volume was anomalously low due to licensing delays, so June’s “surge” doesn’t represent new strength—it’s a partial normalization. Second, the media piece avoids contextualizing the full damage: year-to-date magnet exports from China are still down nearly 19% compared to 2024, and June volumes remain 38% below last year’s June level.
Crucially, the article does not address ongoing structural risks: no mention of China’s leverage over dysprosium and terbium inputs, nor the fragility of the license-based export control system. Retail readers might falsely interpret this rebound as sustainable or permanent.
Rare Earth Exchanges (REEx) suggests that the headline and lead paragraphs lean optimistic, likely shaped by market excitement. The framing subtly implies that trade tensions are easing—yet there’s no confirmation that the broader export environment is stabilizing. Analysts’ predictions of further recovery in July are stated without attribution or evidence.
Remember the “deal” established in London between China and America was an accord to continue to frame and ultimately finalize the actual trade deals moving forward. This is good news that the parties are at the table, with a pathway to a deal. But there is no final deal as of yet.
But Trade Winds Blowing
China’s Commerce Minister Wang Wentao (opens in a new tab) said on July 18 that recent U.S.-China trade talks in Europe have shown there’s no need to escalate into another tariff war. Speaking in Beijing, Wang emphasized the importance of stable trade ties and called on the United States to behave like a “major country” by shouldering its global economic responsibilities. With an August 12 deadline looming to finalize a more permanent tariff agreement, Wang stressed that both sides recognize their deep interdependence, especially in sectors like rare earths and semiconductors. Again, June saw a notable rebound in China’s rare earth exports, and Nvidia's plan to resume AI chip sales to China, both signs that negotiations are making headway.
But it’s important to note, however, Wang warned that U.S. tariffs remain high, averaging 53.6%, and any duties above 35% could devastate Chinese manufacturing margins. While China doesn’t seek a trade war, Wang reiterated, it is prepared for one if necessary, according to multiple accounts, including Reuters (opens in a new tab).
REEx Summary
The recent Reuters pieces capture a valid short-term data point, but at least in the magnet article, overstate its macro significance. While magnet exports jumped in June, the larger trend remains downward, and systemic fragility persists until a definitive deal is in place. For U.S. and allied investors, the real signal is not recovery—it’s a warning.
While the recent shift in tone suggests progress—and the symbolic weight of Liberation Day may have nudged both sides toward recognizing that stable U.S.-China trade serves mutual interests—we are far from declaring victory. The path forward remains precarious, and early optimism should not obscure the structural tensions still at play.
The U.S. and all other free countries MUST wean themselves from China and Russia when it comes to resources they need for defense and economic independence. DO NOT TRUST THEM!!