Beijing Gives Magnet-Maker Green Light to Export Rare Earths to U.S.

Beijing has approved JL MAG Rare-Earth Co. Ltd., a major Chinese producer of rare-earth magnets, to resume exports to destinations including the United States, Europe, and Southeast Asia. This move suggests a softening in China’s stance on rare-earth export controls following trade talks with the U.S. [para. 1][para. 2] JL MAG Rare-Earth’s announcement on Wednesday marks the first public confirmation by a Chinese company of being allowed to directly export rare-earth products to the U.S., though several of its competitors had already received approval for other markets after China added seven mid-to-heavy rare earths to its controlled export list in April—a step widely seen as a countermeasure to U.S. tariffs imposed under President Donald Trump. The company clarified it is not involved in the military industry. [para. 3][para. 4][para. 5]

China remains the dominant force in rare earths, accounting for about 70% of global production and possessing nearly half of the world's total reserves, based on U.S. Geological Survey data. These elements, especially mid-to-heavy rare earths, are critical for defense, aerospace, and advanced technology industries due to their rarity and specialized uses. [para. 3]

A source familiar with China’s export control policies explained that the controls primarily aim to monitor end users and intended uses, rather than enforce an outright export ban. The outcome of export license applications varies significantly depending on whether rare earths are destined for civilian products or sensitive military items. [para. 6]

JL MAG Rare-Earth’s export license sparked positive reactions in the stock market: its Shenzhen-listed shares surged nearly 8% on Wednesday, while peers like Jingzhou Jiuling Science and Technology and Ningbo Souwest Magnetech soared over 20%. Other rare-earth companies, including Zhejiang Zhongke Magnetic Industry, Shanxi Huayang New Material, and Bgrimm Technology, hit their daily trading limits. [para. 7]

This diplomatic development comes after Chinese and American negotiators reached a handshake deal in London on implementing the Geneva trade agreement, which followed two days of talks. Notably, a 90-day pause on most new tariffs was agreed upon on May 12, with China suspending a range of countermeasures, including restrictions on rare-earth exports. [para. 8][para. 9] However, tensions persisted after both nations accused each other of violating the agreement; China allegedly delayed rare earth exports, leading the U.S. to retaliate by revoking visas for Chinese students. The London talks followed a recent phone call between President Donald Trump and Chinese President Xi Jinping, where Trump emphasized the urgency of resolving the rare earths issue. Trump later stated on Truth Social that the framework deal with China was “done, subject to final approval” and covers rare earth supply and Chinese student visas. [para. 10][para. 11][para. 12]

China’s tighter export controls have already disrupted global markets. The process for exporting rare earths has become lengthier and more bureaucratic, leading to lower volumes. In April, China’s rare-earth magnet exports totaled over 2,600 tons—just half the volume of March. The top export destinations were Germany, Vietnam, the U.S., Italy, and South Korea. [para. 13][para. 14]

These restrictions have driven up rare-earth prices and sparked concern, especially in the auto industry. The European Association of Automotive Suppliers warned in June that China’s controls had forced production halts across Europe. In the U.S., Ford suspended production at its Chicago plant for a week in May due to supply disruptions. Some automakers are considering relocating motor or magnet assembly to China to skirt export restrictions, as products integrated into Chinese-assembled motors can be more easily exported. [para. 15][para. 16][para. 17][para. 18]