China pauses rare earth export restrictions on 28 US entities after trade truce

 In a significant step toward easing trade tensions, China on Wednesday lifted export restrictions on rare earths and military-use technologies for 28 U.S. entities.

The move comes just two days after Washington and Beijing struck a breakthrough agreement to temporarily lower tariffs, marking the first major de-escalation in a trade war that had threatened to upend global supply chains and economic stability.\The deal, reached during high-level negotiations in Geneva on May 12, includes a 90-day pause and a sweeping 115-percentage-point reduction in reciprocal tariffs.

The decision is being hailed as a reset in bilateral ties between the world’s two largest economies after months of tit-for-tat escalation.

Reset after retaliation

The suspension of rare earth export curbs took effect Wednesday and will last for 90 days, China’s Ministry of Commerce said in a statement.

During this window, exporters of rare earths and other dual-use goods with military potential can apply for licenses to resume shipments, according to the ministry.\The trade war had entered a particularly volatile phase last month, with U.S. President Donald Trump imposing tariffs of up to 245% on a broad swath of Chinese imports.

Beijing responded in kind with retaliatory measures and a pledge to “fight the tariffs till the end,” a standoff that sent stock markets into a tailspin and raised fears of a global recession.

In retaliation, China halted exports of seven types of rare earth elements to 16 U.S. entities on April 4 and expanded the restrictions to 12 additional firms just five days later.

These included critical materials such as samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — essential components in the manufacture of semiconductors, electric vehicles, missile systems, and aerospace technologies.

In a separate announcement on Wednesday, China’s Ministry of Commerce also said it would temporarily lift a trade and investment ban on 17 U.S. companies, signaling further willingness to dial down tensions.

Race for resources

China currently dominates the global supply of rare earths, accounting for about 90% of production. For certain heavy rare earths like dysprosium and terbium, its market share was as high as 99% until recently.

These elements are vital for the production of clean energy technologies, defense equipment, and other high-tech industries.

The U.S. remains particularly exposed to disruptions in these supply chains. According to the U.S. Geological Survey, China supplied half of America’s critical mineral imports in 2024, including rare earths and other strategic materials such as yttrium, antimony, bismuth, and arsenic.

Reducing this dependence has become a strategic priority for Washington. On Inauguration Day in January, President Trump declared a national energy emergency, citing high energy prices and foreign supply vulnerabilities as threats to national security.

In March, he invoked the Defense Production Act to boost domestic mining of critical minerals, unlocking federal support through loans, tax incentives, and investment partnerships.

The administration is also looking beyond U.S. borders—eyeing rare earth deposits in Greenland and Ukraine and pushing forward plans for deep-sea mining in international waters to secure future supplies.

https://www.msn.com/en-us/money/markets/china-pauses-rare-earth-export-restrictions-on-28-us-entities-after-trade-truce/ar-AA1EMLo8