China grants rare earth export permits after US trade talks, offers
relief but uncertainty persists
[June 13, 2025] By
JOSH FUNK and DIDI TANG
OMAHA, Neb. (AP) — The high-level negotiations over China's export
controls of rare earths is giving U.S. businesses some relief, even
though it may be only for now.
China has approved “a certain number” of export permits for rare earth
elements and related items, its commerce ministry said on Thursday, one
day after U.S. President Donald Trump declared that Beijing would supply
to the U.S. companies those key elements and the magnets made from them
following a two-day trade talk in London.
“I will be one of the happiest people out there if, if in fact, China
starts to, to release some of those heavy rare earths and allows them to
get into the world economy because the world economy is going to shut
down without those heavy rare earths,” said Mark Smith, chief executive
officer of NioCorp., which is developing a new mine in Nebraska to
produce niobium, scandium, titanium and an assortment of rare earths.
Export controls of the minerals apparently eclipsed tariffs in the
latest round of trade negotiations between Beijing and Washington, after
China imposed permitting requirements on seven rare earth elements in
April, threatening to halt production of cars, robots, wind turbines and
other high-tech products in the U.S. and around the world.
Negotiators from the two governments said they reached a framework to
move forward, with details yet to be agreed to by Trump and Chinese
President Xi Jinping, but businesses welcomed the developments, even
though uncertainties persist.
Important elements used in many products
Rare earth elements are some of the most sought-after critical minerals.
Despite the name, they aren't actually rare, but it is hard to find them
in high enough concentrations to make mining them economical. They are
also difficult to extract from the ore, and China over the past several
decades has built dominance in the processing capacity, supplying nearly
90% of the world's rare earths.
In the heat of the tariff war with Trump, Beijing on April 4 announced
permitting requirements for seven heavy rare earths: samarium,
gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, citing
the need to “better safeguard national security and interests and to
fulfill global duties of non-proliferation.”
The elements China has restricted, such as terbium and dysprosium, are
key ingredients needed to make permanent rare earth magnets withstand
high temperatures. That is crucial for a variety of uses in electric
vehicles, wind turbines and military uses like jet engines and nuclear
submarines.
Some of the other rare earths needed for those magnets are produced at
the only operating U.S. rare earths mine run by MP Materials in
California, but China remains the only source of nearly all of what’s
known as the heavy rare earths. MP Materials previously sent the heavy
rare earths that it mines to China for processing but it halted that in
April amid the tariffs. The company is working to expand its own
processing capability as soon as possible, and it is building a new
magnet plant in Texas.
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 Looming shortages start to hit
manufacturing
Neha Mukherjee, rare earths analyst at Benchmark Mineral
Intelligence, had previously predicted that most companies wouldn’t
start to run short of rare earths until later this year, but it
appears some companies already have problems.
“The overall market stockpile exists, but looks like a lot of OEMs
(original equipment manufacturers), especially auto manufacturers,
were not prepared, especially in Europe,” Mukherjee said. Some
American companies have stockpiled, but they “might start
experiencing constraint if this continues.”
“Looks like most of the stockpile is still in China hence the
bottleneck in supply,” Mukherjee said.
On June 4, the European Association of Automotive Supplies said the
industry was “already experiencing significant disruption” due to
China’s export restrictions on rare earths and magnets. “These
restrictions have led to the shutdown of several production lines
and plants across Europe, with further impacts expected in the
coming weeks as inventories deplete,” the group said.
Questions remain about latest trade deal
Details are still scarce on any agreement on rare earths shipments
from China.
On Thursday, He Yadong, spokesman for the Chinese commerce ministry,
said China will “sufficiently consider the reasonable needs and
concerns by all countries in the civilian field" in reviewing
applications of export permits for rare earths and related items.
He said that it is consistent with international practice to put
export controls on rare earths because they can be used for both
civilian and military purposes.
China's limits on rare earths remain a threat
In a note, Gabriel Wildau, managing director of the consultancy
Teneo, wrote that even though there is an agreement for now, “supply
cutoffs will remain an ever-present threat.” That's because China’s
licensing regime for the export of the seven heavy rare earths and
related magnets is permanent, despite perceptions at the time that
it was an act of retaliation, he wrote.
China "will probably not approve exports in sufficient quantity to
allow U.S. customers to stockpile, ensuring that Beijing’s leverage
remains undiminished,” he wrote. “Beijing may approve few if any
exports to U.S. defense companies and their suppliers.”
Smith of NioCorp. said even if the Chinese are offering a reprieve
from their restrictions on rare earths, they will likely still keep
limits in place on U.S. military uses.
“If I’m in the military and flying a jet or running a nuclear class
submarine or a guided missile, I don’t want that to fail because of
high temperatures. So we have to have these heavy rare earths,”
Smith said.
Smith said he hopes to find a solution to the problem of America
being almost entirely dependent on China for these elements.
“I sincerely hope from the bottom of my heart that we use this
situation as our final learning," Smith said. “Let’s take care of
what we know needs to be taken care of.”
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