The US-China trade truce may give American companies an easier time in gaining Beijing’s approval for rare earth export permits, though a complete removal of export restrictions remains unlikely, Reuters reports.
For years, the US has relied heavily on China for its supply of rare earth minerals used in a wide array of modern technologies. Between 2020-2023, about 70% of America’s rare earth imports came from China, government data shows.
In April, in retaliation against sweeping tariffs imposed by US President Donald Trump, China added seven rare earth minerals and related products to its export control list. This decision meant Chinese exporters need to apply for licenses before selling outside the country, especially to the US.
However, with Monday’s announcement of a 90-day trade truce between the world’s two biggest economies, China’s Ministry of Commerce could expedite its approval process for the export permits, which in theory take 45 days, industry sources cited by Reuters said.
“We are expecting to see an acceleration in the issuance of the required export license and exporters with clients in the US might get a license soon,” sources said.
Still, despite the de-escalation of trade tensions, China is unlikely to remove the export controls completely, as they form part of a broader package of measures designed to give Beijing greater control over various critical minerals, they added.
Tesla CEO Elon Musk said last month that his company has been in talks with Chinese authorities to secure licenses for rare earth supplies needed to build its Optimus robots.
China, the world’s largest supplier of critical minerals, began imposing restrictions in 2023 on exports vital to sectors like chipmaking, clean energy and defense. For rare earths, it is currently the world-leading producer, accounting for over 60% of the global mine production and almost the entirety of the processing.
