China’s rare earth exports of all kinds jumped 23% last month, compared to April at a record 5,864.60 tons.
Throughout the escalating trade war between Washington and Beijing, China’s important bargaining chip was its control over rare earth elements. The Trump administration recognised that if the Chinese government restricted the exports of these elements, it could significantly impair global supply chains across the automobile and technology sectors, particularly in the US.
Official data shows that China’s rare earth exports in May surged 23% on the month to their highest in a year. This increase has been possible despite Beijing’s export restrictions on some critical elements, which have resulted in manufacturing shortages and temporarily paused overseas sales. Chinese rare earth exports of all kinds jumped 23% last month, compared to April at a record 5,864.60 tons.
The restrictions do not apply to all types of minerals exported by China, and Monday’s reports do not differentiate between them. Therefore, the full impact of the curbs will only be known once a more detailed report is released later this month. Until May 2025, exports of the group of 17 minerals rose from 24,266.5 tons a year earlier to 24,827 tons.
The April export curbs shut down parts of the global auto industry. China holds a near monopoly on rare earth magnets, which are critical in the production of electric vehicle motors. Asia’s largest economy responded to Trump’s tariffs by adding these rare earth magnets to its export control list, forcing exporters to apply to Beijing for licenses.
Reuters reported that these critical minerals are crucial components for car motors, wind turbines and even US F-35 fighter jets, and their licensing falls under the purview of the Bureau of Industrial Security and Import and Export Control, which is part of the Chinese Ministry of Commerce. Scores of licenses have been issued since April, but lobbyists, executives and diplomats said that they comprise only a small portion of the applications. Requests have poured in from automakers, semiconductor and aerospace firms across countries since the export restrictions were imposed.
Washington has responded to these delays by hitting plane engine parts and other equipment with export curbs, knowing China’s dependence on these imports, while accusing China of backtracking on its pledge to support the mutual tariff rollback, as confirmed in Geneva on May 12.
Last month’s data showed that China’s magnet exports fell by half in April. The curbs caused several European auto part plants to stop production last week, and semiconductor firms warned that they were only a few weeks away from shutting down production themselves. These manufacturing facilities are suspending output, and even big companies like Mercedes-Benz are exploring alternatives to protect themselves against rare earth shortages as a consequence of these curbs from Beijing.
Tariffs and counter-tariffs hurt both sides, as a trade war triggered by protectionism benefits neither side. Prompted by these negative consequences, Trump and Chinese President Xi Jinping had a telephone conversation last week where they further discussed de-escalation efforts. This follows the US President’s announcement that a 90-day tariff halt would be instated after markets crashed following the announcement of the Liberation Day tariffs in April.
On Friday, however, Trump announced that in a move which will certainly lower tensions between the two largest economies in the world, Xi had agreed to export rare earth minerals and magnets to the US. Trump confirmed that the talks had offered much-needed clarity, with both countries respecting the complexity of rare earth products.
According to Reuters, China also granted temporary export licenses to rare earth suppliers of three of the leading US automakers, and US and Chinese policymakers will meet in London on Monday to hold further deliberations, following which more de-escalation measures could be announced.
