Chinas Rare Earth Export Slump Hits Five-Year Low, Threatening Global Industries: Whats Next in the Trade War?

ElianaDigital Marketing2025-06-267890

Beijing's export controls on rare earth products, including powerful magnets, have resulted in a significant drop in exports to a five-year low in May. According to data from Chinese customs, the export volume of rare earth products fell by 61% year-on-year to 2,117 tons, the lowest level since February 2020.

The shortage of vital magnets has threatened industries such as car manufacturing in the US, Europe, and India. The export controls, which were implemented on April 4, cover not just seven individual rare earths but also magnets that contain even tiny amounts of them.

Governments and companies in the US are closely watching how the flows of rare earth products will change in June following a meeting between American and Chinese negotiators in London earlier this month. US President Donald Trump has stated that "FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA."

In the first quarter of 2025, before the export curbs were implemented, magnets accounted for nearly 90% of the rare earth products group. The data for last month shows the extent to which the export controls have curbed shipments.

China produces about 90% of the world's so-called permanent rare earth magnets and has used its grip on supplies to fight a burgeoning trade war with the US. The latest developments in this ongoing trade dispute will be closely monitored by industry stakeholders and policymakers alike.