China’s Rare-Earth Exports Hit 8-Month High Amid U.S. Trade Squeeze

• China reduced rare-earth magnet exports to the U.S. by 5% in August while raising global shipments to their highest level since January.
• The move underscores China's strategic control over the rare-earth supply chain amid intensifying geopolitical tensions.

China curtailed its rare-earth magnet exports to the United States by 5% in August 2025, shipping 590 metric tons to its largest trade rival. This reduction comes as overall rare-earth magnet exports surged to 6,146 metric tons, the highest monthly level since early 2025, per official customs data. The selective reduction in shipments to the U.S. highlights China's deliberate use of its trade policies to navigate ongoing geopolitical challenges.

Accounting for roughly 90% of global rare-earth magnet production, China supplies industries critical to advanced technologies, including electric vehicles (EVs), wind turbines, and military systems. Beijing’s commanding position has proven central in trade negotiations, particularly with the United States and the European Union. Recent talks between President Trump and Chinese leader Xi Jinping have spotlighted rare-earth trade restrictions as an instrumental leverage point in their efforts to ease trade frictions.

In August 2025, Beijing broadened its domestic quota system to include imported raw materials while mandating monthly product flow reports. These measures reinforce China's control over the rare-earth supply chain. Earlier this year, in April, China imposed export restrictions that rattled sectors reliant on these materials. While some broad limitations have since been relaxed, the targeted reduction in exports to the U.S. signals a calculated and strategic trade response.

Meanwhile, the European Union and the United States have stepped up efforts to reduce dependence on Chinese rare earths. Neo Performance Materials recently launched a facility in Estonia, doubling Europe's rare-earth magnet production capacity to 2,000 tons annually—enough to supply magnets for one million EVs. This move is part of the EU’s wider Critical Raw Materials Act, which supports ambitious 2030 goals for material extraction, processing, and recycling as global competition for these resources intensifies.

In the U.S., companies are actively working to bolster a domestic rare-earth supply chain. MP Materials Corp., the country’s sole rare-earth mining operation, has begun commercial production of neodymium-praseodymium metal at its Texas facility, targeting magnet production by late 2025. The project is supported by a $400 million Department of Defense investment. Additionally, USA Rare Earth has started prototyping magnets in Oklahoma, with plans to begin commercial production in 2026, while Noveon Magnetics has already started delivering magnets through long-term contracts.

The U.S. and EU initiatives underscore a shared strategy to secure rare-earth independence as demand for magnets surges. The growing prominence of EVs and renewable energy industries highlights the critical nature of securing stable and diversified supply chains.