Reduced China Exports of Rare Earth Magnets Stoke Supply Chain Fears

China’s exports of rare earth magnets fell in September, reigniting fears that the world’s top supplier could wield its dominance over a component crucial to U.S. defense firms and manufacturers of products from cars to smartphones as leverage in trade talks, Joe Cash reported for Reuters.

China’s shipments of rare earth magnets fell 6.1% in September from August. (Photo: Gregory F. Maxwell, Wikimedia Commons) 

In April and May, Beijing squeezed global automakers with export curbs on a range of rare earth items and related magnets, while negotiators faced off over triple-digit U.S. tariffs on goods from the world’s second-largest economy.

Four months later, after Washington and Beijing unexpectedly revived threats of fresh tariffs and rare earth export curbs, concerns are growing that China could return to the same playbook—reneging on a June deal with the U.S. to ease the flow of critical minerals.

China’s shipments of rare earth magnets fell 6.1% in September from August, customs data showed, ending three consecutive months of gains. The decline came even before Beijing unveiled a dramatic expansion of its export licensing regime this month.

“The sharp swings in rare earth magnet exports show that China knows it holds a key card in international trade talks,” said Chim Lee, senior analyst at the Economist Intelligence Unit.