General Discussion, page-2174

Info.Rare Earth Exports Fall to Zero
By Hannes Vogel June 28, 2025, 7:18 AM
"Chinese customs have been blocking goods since the beginning of April – including tradium. And no one can say how long this situation will last," says Matthias Rüth.

"Chinese customs have been blocking goods since the beginning of April – including tradium. And no one can say how long this situation will last," says Matthias Rüth.

Beijing has effectively halted the export of irreplaceable minerals for electric cars, wind turbines, and other high-tech products. Even though there are signs of easing from China: "The supply situation could deteriorate further at any time," says a trader for the specialty metals.

Just a few weeks after China restricted exports of rare earths, there are mounting indications that the export barriers are massively jeopardizing the global supply of these critical metals. In the trade war with the US, Beijing unleashed its superweapon for the first time in April, introducing export licenses for the sale of seven irreplaceable minerals for the high-tech industry abroad. The effect of these bureaucratic trade hurdles was previously unclear because no one knew how the Chinese authorities would implement the paperwork – and whether they would merely temporarily delay, slow down, or completely stop exports.

It's now clear: "China is flexing its muscles," says Tradium Managing Director Matthias Rüth, who heads one of Germany's most important traders for specialty metals. "Chinese customs has been blocking goods since the beginning of April – including Tradium. And no one can say how long this situation will last."

Export Barriers for Rare Earths: China's Superweapon in the Trade War Targets the Entire World

According to data from the Chinese customs authorities, exports of terbium and dysprosium – two of the seven so-called heavy rare earths whose exports the People's Republic has restricted – fell to zero in May, as reported by the specialist portal rohstoff.net. China has a global monopoly on the production of these irreplaceable metals, which are primarily used to make high-performance magnets for electric motors in electric cars, wind turbines, and high-tech weapons, which must be particularly heat-resistant and powerful.

Exports of finished rare earth magnets also fell by three-quarters in May compared to the same month last year. With 209 tons, Germany was the second-largest buyer of Chinese magnets worldwide. Only 46 tons went to the USA – a drop of more than 90 percent compared to the previous year. China has effectively cut off Washington's supply lines for permanent magnets, which are just as indispensable in drones and cruise missiles as they are in loudspeakers, hard drives, and cell phones. Production lines at some automakers and suppliers in the US, Japan, and Germany have already been shut down due to the supply bottlenecks.
China has found the US's pain point

The export ban is Beijing's greatest leverage in the tariff dispute with Donald Trump. Because exports threatened to dry up, China and the US agreed to a 90-day tariff pause in secret negotiations in Geneva in May. When this ceasefire threatened to derail, the two sides agreed to a framework agreement in London in June after two days of marathon negotiations. This supposedly saved the supply: "All the magnets and all the necessary rare earths will be delivered in advance by China," Trump posted triumphantly on Truth Social. But that is far from certain.

America is concerned about rare earths: USA and China agree on new trade framework

Terbium and dysprosium are by no means the only metals whose exports China has effectively stopped. The list is getting longer and longer: The People's Republic also stopped exporting gallium in May, even though exports a year ago were still over 6,000 kilograms. Trade in germanium, which, like gallium, is essential for chip production, infrared vision devices, and fiber optic technology, fell by more than 60 percent. Reducing exports is clearly a strategic decision that bodes poorly for rare earths either: "The world is dependent on China. There is almost no alternative for rare earths. Production in the rest of the world amounts to a maximum of five percent," says Rüth.

There are, however, some easing measures: According to the USA, both sides have now finalized and signed the details of the London framework agreement. According to insiders, Volkswagen, for example, has received licenses to supply permanent magnets from China despite export controls after the company made representations to the government in Beijing. Furthermore, the Chinese customs data is incomplete.meaningful, as they arrive with a delay and still reflect the state of exports before Beijing and Washington agreed to a ceasefire in the trade war.
"Supplies can deteriorate at any time"

But there were many indications that the risk was far from averted. By no means all automakers were able to source supplies from China: "Automakers and suppliers have also contacted us in recent weeks," reports Rüth. "There may be reason for some optimism, but no all-clear. The supply situation could deteriorate further at any time."

It is unclear how long the ceasefire with the People's Republic will last: China has stated that both sides have "further confirmed the details of the framework agreement." But far less euphoric signals are coming from Beijing than from Washington. The statement from the Ministry of Commerce does not even explicitly mention rare earths. Instead, it merely reiterates that it intends to "approve export applications for restricted items that meet the requirements in accordance with the law." This leaves plenty of loopholes open for cutting off supplies at any time.

Moreover, the export licenses for rare earths that China promised the US in London about two weeks ago are only valid for a limited period of six months, according to the Wall Street Journal. US President Donald Trump has already approved the deal, but Chinese President Xi Jinping hasn't yet. Until he says yes,
3 to 75 percent surcharge: China imposes new tariffs on imports from the EU

Everything depends on the implementation of the agreement. No one knows how long it will take to clear the backlog of potentially tens of thousands of export applications. And whether Beijing even wants that: "It is unlikely that China will withdraw its export restrictions so soon after their introduction," says Rüth. "The measures underscore its political claim to be taken seriously as a raw materials power." Perhaps some applications would be processed somewhat more quickly. "Nevertheless, little is likely to change in the basic policy."

When Beijing introduced similar export licenses for gallium and germanium in the summer of 2023, the processing time was around 45 days. So everything depends on what China does now, not what it says. Customs data typically appears with a delay of about three weeks. So it could take until August before the world knows whether China keeps its promises. By then, it may already be too late.

Source: ntv.de