China’s shipments of rare-earth magnets to the United States jumped over sevenfold in June, following a preliminary trade agreement between Washington and Beijing that eased export controls on the critical materials.
Data from China’s General Administration of Customs showed the U.S. imported about 353 metric tons of rare-earth permanent magnets last month, a 660 percent increase from May. Despite the sharp month-on-month rise, the figure remains roughly half of what was recorded in June 2024.
The surge follows China’s decision in April to require export licenses for certain high-tech magnets, widely used in electric vehicles, medical imaging, wind turbines, and emerging technologies such as robotics. The restrictions were seen as a countermeasure to President Donald Trump’s steep tariffs on Chinese goods.
With China controlling an estimated 90 percent of the global market for rare-earth magnet production and processing, the U.S. has few immediate alternatives. Washington’s manufacturing sector, particularly in electronics, automotive, and clean energy, depends heavily on imports from Chinese suppliers.
June’s spike came after both countries reached a framework agreement last month, which included reduced U.S. restrictions on tech exports to China and greater Chinese flexibility on rare-earth magnet shipments. AI giant Nvidia announced plans to resume deliveries of its H20 chips to China as part of the easing.
China exported a total of 3,188 metric tons of rare-earth magnets globally in June, up nearly 160 percent from the previous month but still 38 percent below the same time last year.
The sudden availability of magnets is expected to ease supply chain issues for industries facing production delays. European auto-parts makers and Tesla’s Optimus robot program were among those affected by earlier shortages.
While some nations have begun exploring domestic rare-earth mining and refining, analysts say building a supply chain rivaling China’s will take years. “The separation process is quite complex, and China has a lot of advantages in this after putting in decades of research into the processes,” said Yue Wang, a senior consultant at Wood Mackenzie.
To reduce reliance on foreign sources, U.S. tech giant Apple and MP Materials announced a $500 million plan last week to build a recycling facility that will strengthen the domestic magnet supply.
Commenting on the new trade dynamic, Peter Alexander of Z-ben Advisors said the U.S. policy shift reflected China’s “considerable leverage” in negotiations, speaking on CNBC’s China Connection Monday.
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