 |
| US China Rare earth |
Temporary Suspension Reflects US-China Trade Agreement
China agreed to suspend new rare earth element export controls for one year following a trade deal with the United States. This decision halts the planned expansion of export licenses, easing global supply concerns. Meanwhile, US tariffs on Chinese goods will decrease from 57% to 47%, signaling thawed trade tensions.
Rare Earth Supply Chain and Strategic Implications
China dominates roughly 90% of global rare earth refining and permanent magnet production. Therefore, the suspension provides temporary relief for critical industries in the US, Japan, and Europe. However, China retains export limits introduced in April 2025, maintaining leverage over the strategic metals market.
Global Coordination on Critical Minerals
G7 nations plan to implement agreements for stockpiling and minimum purchase guarantees of critical minerals. As a result, countries aim to reduce dependency on Chinese REE supplies. In contrast, the US continues to rebuild its domestic supply chain to secure metals essential for energy transition and advanced manufacturing.
ScrapInsight Commentary
China’s one-year suspension of REE export controls temporarily stabilizes global rare earth supply. Strategic stockpiling and domestic supply chain rebuilding in the US and G7 nations will mitigate long-term dependency risks. This development reinforces the critical role of rare metals in circular economy and energy transition strategies.
