China’s flows of rare-earth magnets to the US continued to recover in July — with volumes rising 76% month-on-month — after Beijing agreed to normalize exports as part of its trade truce with Washington.
The Asian nation shipped 619 tons of rare-earth permanent magnets to the US, up from a low of 46 tons in May, when the two countries were still locked in a damaging tit-for-tat trade war. China put export controls on the components, weaponizing the nation’s 90% grip on global production to squeeze US factories and pile pressure on President Donald Trump.
Rare-earth magnets are used in everything from cars to dishwashers and fighter jets, and proved to be Beijing’s most potent weapon in the trade standoff. Following talks in Geneva and London this summer, Chinese negotiators pledged to normalize flows. The US is “very happy” with the status quo on trade with China, Treasury Secretary Scott Bessent said in a Fox News interview.
Still, total supplies to the US this year are lagging because of the earlier deep slump. Average monthly volumes for January to July are about 28% lower than for all of 2024.
China’s export controls targeted seven of the 17 rare-earth elements, but also covered magnets that can contain just a tiny amount of those restricted materials. That snarled up supplies to all nations while China’s bureaucracy and buyers worldwide adjusted to the new regime.
The magnet crisis spurred the Trump administration to pursue a more aggressive policy on building a domestic rare-earths supply chain. In July, the Department of Defense agreed to supply deals and a $400 million investment in MP Materials Corp., for now the sole US rare-earths miner. The company’s shares have since surged more than 130%.
Magnet supplies to most other major buyers also rebounded. Shipments for Japan rose 76%, while those to Germany gained 46% and India surged 143%.
The rare earths issue had created contention between India and China amid a broader thawing of relations. Beijing has assured India of supplies, an official in New Delhi told reporters on Monday, asking not to be identified because discussions are private.
China’s public trade data doesn’t distinguish between permanent magnets that contain the restricted rare earths, and those which don’t. The latter are theoretically not subject to export controls imposed since early April.
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