China’s Rare Earth Magnet Exports Stagnate Despite Trade Promises

China’s rare earth magnet exports have hit a standstill, even after a recent commitment to ease restrictions as part of a trade agreement with the Trump administration, according to a report by The Wall Street Journal.

During a meeting in London, a trade ceasefire was brokered in Geneva earlier this year. This agreement included assurances from Chinese officials to relax export controls on rare earth elements and reduce tariffs on U.S. goods down to 10%. However, many Western manufacturers are still struggling to secure the necessary supplies, the WSJ noted.

“Although export restrictions appear to be lifted on paper, the reality is very different,” remarked Neha Mukherjee, a rare earth analyst at Benchmark Mineral Intelligence. She characterized the licensing process as a “bureaucratic drag,” which complicates matters for those in the industry.

From 2020 to 2023, China was responsible for about 70% of U.S. rare earth metal imports, according to a January report by the U.S. Geological Survey. China holds an estimated 44 million tons of rare earth deposits compared to a mere 1.9 million tons that are U.S.-owned.

After imposing new export controls on several rare earth elements in April—following tariffs from President Trump’s earlier policies—China’s actions have led to ongoing concerns among U.S. companies. Industry leaders stress that delays from China could severely disrupt supply chains.

Several businesses have reported operating under precarious conditions, often resorting to costly air freight transportation to prevent shutdowns. For instance, Ford had to temporarily stop production of Explorer SUVs in Chicago due to a materials shortage.

On Thursday, China’s Commerce Ministry announced that it would expedite the review process for export license applications and had approved a “certain number” of them. Yet, many companies express frustration, saying Chinese authorities are still moving slowly.

Currently, license applications take over a month to process. Some have faced outright rejection for omitting sensitive information, with reports that companies are being required to disclose customer identities. Furthermore, even the design of the components using the magnets has been scrutinized, given the past concerns over Chinese intellectual property theft.

While many companies attempt to meet these information requests, magnet companies with strong ties to the Chinese government seem to receive their export licenses more swiftly than smaller private operators.

A White House official commented on the progress made during the Geneva-London consultations, noting that the administration continues to monitor China’s adherence to the agreement reached in Geneva.