Caixin Explains: China-U.S. Rare Earth Truce Buys Time as Washington Hunts New Supply Chains
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China and the U.S. have agreed to suspend newly announced export restrictions for one year, pausing an escalating trade dispute that had threatened to disrupt global supply chains for critical minerals and unsettle international markets.
The agreement followed an Oct. 30 meeting between Chinese President Xi Jinping and U.S. President Donald Trump in Busan, South Korea. Both governments confirmed they will temporarily halt their latest trade restrictions, including Washington’s enforcement of its controversial “50% ownership rule” and Beijing’s retaliatory curbs on exports of rare earths, lithium battery components, and graphite materials.
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- China and the U.S. agreed to suspend new export restrictions for one year, halting measures targeting rare earths, lithium battery materials, and advanced tech.
- The U.S. is securing alternative mineral sources through new deals with Australia, Japan, Malaysia, and Thailand, aiming to reduce reliance on China.
- Existing Chinese controls and U.S. restrictions remain on some materials, with China’s rare earth exports to the U.S. down 24.6% year-on-year through September.
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- MP Materials Corp.
- MP Materials Corp., backed by the U.S. Department of Defense, is developing a second magnet plant. This facility, projected to open by 2028, aims for an annual production capacity of 10,000 tons. Its establishment is expected to significantly decrease U.S. reliance on Chinese rare earth magnets.
- Lynas Rare Earths Ltd.
- Lynas Rare Earths Ltd. is an Australian company leading non-Chinese heavy rare earth production. It has a Malaysian facility producing dysprosium and terbium, and plans a new separation plant for yttrium and samarium by 2026. The U.S. has a partnership with Malaysia supporting Lynas's plant expansion.
- 2025：
- Lynas's Malaysian facility begins producing dysprosium and terbium.
- April 2025：
- China implements previous restrictions covering rare earth elements like samarium and gadolinium.
- Through September 2025：
- China's rare earth exports to the U.S. drop 24.6% year-on-year.
- Sept. 29, 2025：
- The U.S. '50% ownership rule' was set to take effect.
- Early October 2025：
- Both the U.S. and China announce new export restrictions: the U.S. unveils the '50% ownership rule' and China announces six new export control measures affecting rare earths, lithium battery materials, and graphite-related equipment.
- Oct. 20–28, 2025：
- U.S. President Trump's Asia tour focuses on mineral diplomacy, resulting in a series of supply deals with Australia, Japan, Malaysia, and Thailand.
- Oct. 30, 2025：
- Chinese President Xi Jinping and U.S. President Donald Trump meet in Busan, South Korea, and agree to suspend newly announced export restrictions for one year.
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