US Scrambles to Secure Rare-Earth Magnets During US-China Trade Truce

For June 2025, data showed that China exported 353 tonnes of rare-earth magnets to the USA, representing a 669% surge compared to May 2025. Altogether, China exported 3,188 tonnes of rare-earth magnets in June 2025, but the amount is 38% lower compared to June 2024. As part of the 90-day trade truce, the US is lifting restrictions on the export of advanced AI chips such as the Nvidia H20 to China.

Thus, the US represented more than 11% of Chinese exports in this category of #CriticalMinerals for jet engines, smartphones, medical devices, wind turbines and even electric vehicles (#EV). The US is the 2nd largest destination market of Chinese Rare Earth behind Germany.

Although rare earth elements (REE) are not actually that rare, the fact is their extraction and refining is quite a complex task. With 70% of the mining and 90% of the refining 90% of the rare earth elements in the world, China controls the global supply chain for REE.

Previously, Tesla reported that its production of EV and humanoid robots have been disrupted to to the shortage of strong and compact magnets made from rare earth elements.

Thus, affected industries have urged their governments to develop domestic capabilities for rare-earth. As the process is quite messy and intricate, experts believe that it might take years to ramp up an alternative supply chain for rare earth.

Another alternative being pushed is to promote the recycling of Rare Earths. In June 2025, Apple and MP Materials announced they are partnering to invest USD 500 million in a recycling facility do just that.

The EU was also hit by the export restriction of rare earth by China. The retaliation is tit-for-tat response for the EU’s decision to hike tariffs on Chinese EU, which the EU views as ‘dumping’ and a threat to its local auto industry.