Chinese Suppliers Hold Back Rare Earths Ahead of Xi’s U.S. Visit
Some Chinese rare-earth suppliers are withholding U.S.-bound material despite available licences, exposing persistent vulnerabilities ahead of Xi Jinping’s planned Washington visit. U.S. diversification efforts are growing, but new capacity remains years away.
China rare earth firms halt some US shipments over geopolitical worries, sources say
China rare earth firms halt some US shipments over geopolitical worries
Some Chinese rare earth suppliers have reportedly halted some US shipments
Chinese Rare Earth Suppliers Are Holding Back US Shipments Even When Export Licenses Are Approved
Chinese companies halt some rare earth shipments to US
Private caution becomes a public pressure point
Some Chinese rare-earth suppliers have stopped or refused shipments to U.S. customers, even where export licences were available, because they fear punishment from Beijing, people familiar with the trade said.reuters +1 The pullback has affected a handful of suppliers since early August and follows Chinese sanctions on the Responsible Business Alliance, a U.S.-based supply-chain auditing group.mediaselangor +1
The scale of the disruption remains unclear. One source cited four cases in which sellers withheld material over concern that it could be resold to restricted users, while some American companies have waited more than six months for mineral licences.reuters +1 The friction has entered U.S. preparations for Chinese President Xi Jinping’s planned September 24 visit to Washington.mediaselangor +1
A licensing recovery with critical gaps
Chinese exports of many rare-earth products and magnets have recovered from restrictions imposed in April 2025, but flows to the United States remain uneven. Yttrium exports to the U.S. are running at roughly half their 2024 level, despite a July shipment of 27 tonnes after two months with none.mediaselangor +1 Prices for yttrium, tungsten and indium phosphide—materials used in aerospace, chipmaking and other sensitive industries—remain near record highs amid tight supply.reuters +1
That leaves the dispute suspended between commercial caution and state policy. China says it remains committed to stable global critical-mineral supply chains, while arguing that its sanctions answered U.S. restrictions on Chinese technology and testing groups.mediaselangor Washington, meanwhile, says it is pressing Beijing to comply with earlier commitments intended to keep export licences moving.reuters
Diversification is advancing more slowly than the risk
The immediate danger extends beyond defence contractors. Aerospace suppliers use yttrium in heat-resistant engine coatings, and earlier shortages forced rationing and raised the possibility of production pauses.reuters +1 Medical-device and energy companies have also been affected by licensing delays.mediaselangor
The United States has committed more than $7.3 billion through several agencies to expand mining, processing and magnet production, including support for MP Materials’ Mountain Pass operation in California.csis Yet domestic production supplied only about one-third of U.S. consumption in 2025, while China accounted for 71% of imports.csis
New projects and partnerships with Australia, Japan, Malaysia and Saudi Arabia could reduce that exposure, but mines and separation plants take years to reach commercial output.csis The latest shipment refusals show why approved paperwork alone cannot guarantee supply: Beijing’s leverage also shapes the risk calculations of private exporters. A diplomatic easing around Xi’s visit could release more material, but it would not remove the underlying chokepoint.mediaselangor +1