8 July 2026, 17:55 UTC

China Eases Rare Earth Export Controls After Trump-Xi Summit, but Grip Persists

China is shipping more rare-earth products as its export licensing regime loosens following a framework trade deal with the United States and a Trump-Xi summit. Analysts including BMI and researchers at Resources for the Future say Beijing's structural control over mining, processing and magnet production means the underlying dependence of importers has not changed.

Exports Rise as Licensing Regime Softens

China is shipping more rare-earth products as export controls ease, Bloomberg reported, following a framework trade agreement between Washington and Beijing and a summit between President Trump and President Xi Jinping. The shift marks a partial rollback of restrictions that Beijing imposed in April 2025, when it required exporters to obtain licenses to sell seven rare earth elements and related embedded products to all countries, according to a brief published by Resources for the Future (RFF).

The restricted elements — scandium, yttrium, samarium, gadolinium, terbium, dysprosium and lutetium — are classified as medium and heavy rare earths, prized for magnetic, optical and catalytic properties used across defense, clean energy and digital infrastructure manufacturing, RFF said.

Trade Deal Eased Flows, but Licensing Stays in Place

A framework trade deal reached between the United States and China in June 2025 was expected to ease the rare earth restrictions, RFF noted. Exports to the United States surged in June 2025 compared with May, the brief said, citing Reuters. However, RFF cautioned that the licensing system itself remains in force, and approvals for Western companies are taking longer amid increased scrutiny of applications.

Beijing's Structural Dominance Remains Intact

Despite the loosening of flows, China's underlying control over the rare earths supply chain has not diminished, according to BMI, cited by Mining.com, which said China's grip on the sector persists despite the Trump-Xi summit. RFF's analysis backs that assessment on the numbers: China mines more than 60% and processes more than 80% of the world's rare earths, and produces around 90% of the world's high-performance rare earth magnets, citing figures from the Rare Earth Industry Association and researcher Gracelin Baskaran.

A Game-Theoretic Reading of Beijing's Strategy

RFF frames China's April restrictions and subsequent easing as a strategic move in a repeated negotiating game between China and the rest of the world. In a single round, the analysis finds, maintaining the status quo — China continuing exports while other countries do not invest in alternative capacity — is the only stable outcome, since either side moving away from it bears costs without a durable payoff. But because the interaction repeats over time, a period of restriction followed by relaxation can still push governments and companies outside China toward diversifying supply, out of concern that restrictions could return.

April 2025: China requires licenses for exports of seven medium and heavy rare earth elements and related products to all countries
June 2025: US-China trade framework agreed; rare earth exports to the US rise month-on-month
Licensing system remains active; Western firms report longer approval times and heavier scrutiny
China share of global supply chain: over 60% of mining, over 80% of processing, about 90% of high-performance magnet production

What It Means for Buyers

For manufacturers in defense, clean energy and electronics that rely on dysprosium, terbium, samarium and related magnet inputs, the immediate easing of shipments offers relief on near-term availability. But the persistence of China's licensing authority, combined with its dominant share of mining and processing capacity, means procurement risk has not been removed — only deferred, according to the sources.

Expert commentary

“What you're seeing is China turning the tap back on, not giving up the valve. They loosened licensing after the summit because the trade framework needed a good-faith gesture, and shipments to the US picked up in June. But nobody handed back the review mechanism. Every export still needs a license, and Western buyers are telling us those approvals are slower and more scrutinized than before the whole episode started. That's not deregulation, that's managed access.

The numbers explain why Beijing can afford to be generous right now. When you control over eighty percent of processing and ninety percent of magnet output, easing restrictions costs you almost nothing — you're still the only seller with real capacity, so the leverage doesn't go away, it just gets quieter. The losers if this drags on are downstream manufacturers who assumed April's restrictions were a one-off shock rather than a demonstrated capability Beijing can use again.

What I'd watch is whether Western capacity investment actually follows through this time. Every previous scare has produced pledges and not much processing capacity on the ground. If governments treat this easing as the crisis being over, they'll under-invest again, and the next restriction will hit just as hard. If instead they read it as proof China will use licensing as a lever whenever talks stall, you'll see real money go into non-Chinese refining and magnet production — and that's the scenario that actually shifts pricing power over the next few years.”

Chen Wei

Metals & Mining Analyst