China tightens rare-earth exports amid looming US–China tensions over critical minerals

China has restricted shipments of key rare-earth materials to the US and its allies amid escalating geopolitical tensions, raising concerns over supply chain disruptions ahead of Xi Jinping’s anticipated visit to Washington.

Access to Chinese rare-earth materials has moved on to the US agenda for Xi Jinping’s expected visit to Washington on 24 September, after some suppliers stopped or slowed shipments to American customers and some importers were left waiting more than six months for export licences. Reuters also reported that several US companies have only recently begun receiving multiple approvals after long delays, suggesting that Beijing may be calibrating supply in the run-up to the summit. (uk.marketscreener.com)

The immediate trigger appears to have been China’s move in early August against the Responsible Business Alliance, a US-based supply-chain body. Reuters reported that a handful of Chinese suppliers have refused to send rare-earth material to US buyers since those sanctions were announced because they feared punishment for using the due-diligence framework of the Responsible Minerals Initiative, which sits within the RBA. Other suppliers had already stepped back from US sales in recent months to avoid geopolitical risk, and one person briefed on the trade told Reuters of four cases in which Chinese firms declined orders because the material might later be resold to prohibited end users. Reuters said it could not determine how many suppliers had ultimately blocked cargoes. (uk.marketscreener.com)

The RBA said on 14 August that it had been added to China’s Ministry of Commerce countermeasures list and that it “takes this matter very seriously”. It said it was still supporting members’ due-diligence work across global supply chains and remained in active contact with companies dealing with the fallout, while adding that the Chinese measures apply to entities and individuals operating within China and do not affect the RBA’s operations elsewhere. Beijing’s announcement named six organisations, including the RBA, Applied DNA Sciences, Stratum Reservoir, Altana Technologies, Verite Group and Human Rights in China, and said people and organisations in China were barred from transactions, co-operation and related activity with them. (responsiblebusiness.org)

China presented that decision as part of a broader retaliation package. A Xinhua report on the ministry’s announcement said the same round of countermeasures also included a national-security investigation into some imported office equipment, tighter case-by-case scrutiny for drone-related exports to the US, action against Compliance Testing LLC and the suspension of some US-based certification bodies from follow-up factory inspections under China’s compulsory certification system. Reuters reported that, when US officials raised rare earths in bilateral meetings, Chinese officials replied that recent FCC restrictions breached the Busan understanding between the two countries. One FCC fact sheet published on 23 March said the agency had added all foreign-made consumer routers to its Covered List after executive-branch security findings, and noted similar determinations in December and January involving drones and critical components. The FCC also said existing authorised router models could continue to be used and sold. (english.scio.gov.cn)

The technical exposure is clearest in yttrium. The US Geological Survey said in its 2026 Mineral Commodity Summaries that China tightened rare-earth export controls in April 2025 and added specific controls on yttrium metals, oxides, alloys and compounds. The same publication put US net import reliance for yttrium at 100% and said shipping records for 2021-24 indicated that 70% of imported yttrium alloys, compounds and metals came from China, with nearly all imported yttrium metal and compounds derived from concentrates processed there. The International Energy Agency has described this as part of a wider concentration problem: its 2025 outlook said the share of the top three refining countries for key energy minerals rose to 86% in 2024 from about 82% in 2020, with almost all recent supply growth in rare earths coming from China. (pubs.usgs.gov)

That concentration helps explain why even partial easing has not resolved the pressure. Reuters said exports of many rare earths and related magnets have recovered since the 2025 controls, but supplies of yttrium, indium phosphide and tungsten remain tight and prices are still near record highs. The disruption is now reaching sectors beyond defence and semiconductors, including medical devices and energy. Chinese customs data cited by Reuters showed that China shipped 27 tonnes of yttrium to the US in July after two months with no exports at all, making July the second-strongest month since January 2025, yet overall shipments this year are still only about half the 2024 level. US officials, Reuters added, have continued pressing Beijing to honour commitments made in Busan and Beijing to keep export licences flowing. (uk.marketscreener.com)

The problem is not confined to American buyers. Reuters reported that licence approvals have been even more constrained for India and Japan, and that Chinese suppliers are in most cases avoiding shipments to Japanese firms altogether. Japan’s trade minister, Ryosei Akazawa, has previously said Japanese companies faced permit delays and extended customs checks for critical minerals. Customs figures cited by Reuters showed that China exported no terbium to Japan between January and August, compared with 20 tonnes in the same period a year earlier; gallium exports fell 65%, while yttrium shipments dropped 98%. The European Chamber of Commerce in China told Reuters that, although procedures had improved, members still wanted a “transparent and predictable application process”. (uk.marketscreener.com)

For now, the near-term question is whether Beijing chooses to loosen approvals before the Washington meeting. Reuters said China’s foreign ministry maintained that Beijing remained committed to stable global critical-mineral supply chains, while some companies expect more licences to be granted around the summit. The broader strategic picture is less encouraging. The IEA’s analysis suggests that diversification in refining is improving only slowly, which means each licensing delay, customs hold-up or politically driven shipment refusal can still ripple quickly into aerospace, electronics, energy and defence supply chains far beyond China and the US. (uk.marketscreener.com)