China’s shipments of rare earth magnets to the US fell sharply last month, according to official Chinese customs data released Sunday.
Supply of the materials, critical to high-end manufacturing, is expected to be a major point of friction at Trump’s summit with Xi this week.
Shipments fell to 512 tonnes in August, down 20% from July and 13% below the same month last year, according to the customs data.
A key point of leverage in trade talks
Rare earths are among dozens of Chinese-controlled critical minerals essential to advanced materials and high-tech hardware.
China is the world’s largest producer, and Beijing has used access to rare earths and their magnets as leverage in trade talks since Trump introduced tariffs last year.
Washington believes China has not fully honored its commitment to uninterrupted supply, a key part of the one-year trade truce the two leaders agreed to in Busan last November.
Export volumes have broadly recovered since bottoming at 46.4 tonnes in May 2025, in the immediate aftermath of Trump’s sweeping “liberation day” tariffs.
But prices remain elevated, and industry groups remain concerned Beijing could tighten supply again, threatening production of everything from cars to fighter jets.
Bessent and He Lifeng meet ahead of summit
US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met in New York on Sunday ahead of the summit.
Bessent told the reporters that the two sides had agreed to set up a dialogue mechanism for AI, and also discussed extending the trade truce.
Capital Economics analysts said in a research note earlier this month that the pace of decline in Chinese rare earth metal shipments to the US is now the fastest since the pandemic.
“Beijing appears willing to test the limits of the truce. It has deliberately kept licence approvals slow and selective,” the analysts said.
Some Chinese suppliers are refusing shipments on their own
Beyond official export controls, some Chinese rare earth suppliers are independently declining to ship to the US out of fear of repercussions from Beijing, three sources told Reuters, earlier this month.
A handful of firms have refused shipments since early August.
That’s when China sanctioned the Responsible Business Alliance, a US supply-chain monitor, and the firms grew wary of being punished for complying with its due diligence framework.
According to the Reuters report, Chinese rare earth companies had already been avoiding US shipments in recent months.
The goal was to sidestep geopolitical entanglement altogether.
Reuters cited at least four instances where firms declined to send material, fearing it could be resold to sanctioned end users.
The West’s alternative supply chain is still years away
Over the past year, the US and European countries have stepped up efforts to build a non-Chinese rare earths supply chain.
But many analysts believe any meaningful shift remains years, if not decades, away.
China has also curbed rare earth exports to dozens of Japanese companies this year.
The restrictions come after Japanese Prime Minister Sanae Takaichi made remarks about Tokyo’s role in a hypothetical conflict over Taiwan, expanding restrictions already in place.
Chinese rare earth magnet exports to Japan fell 17% year-on-year in August, while exports to Germany fell 22%, according to the customs data.
Capital Economics noted that while Beijing has not applied the same pressure to European supply as it has to the US, Europe’s reliance on Chinese rare earths leaves the bloc “in a difficult position” amid ongoing China-EU trade tensions.
The post China’s rare earth exports to US fall 20% ahead of Trump-Xi summit appeared first on Invezz