Shipments of rare-earth magnets from China to the United States have not recovered since the October 2025 trade truce between former President Trump and Chinese President Xi Jinping, remaining significantly lower than before the escalation of export controls.
US imports for the first two months of 2026 dropped 22% compared with the same period in 2025 and are still 11% down relative to 2024 figures. This decline followed China's imposition of strict export restrictions starting in April 2025, which Beijing justified as national security measures. From Washington’s perspective, these actions were seen as retaliatory, leading to an immediate collapse in shipment volumes and forcing US companies reliant on Chinese supply to seek alternatives.
The truce aimed to normalize trade flows but failed to stabilize exports. Chinese shipments remain erratic, with unpredictable licensing procedures complicating long-term supply planning for American importers. Further restrictions were introduced in June 2026, targeting US firms such as MP Materials and USA Rare Earth that are central to America’s domestic rare-earth supply chain initiatives.
Europe's Recovery Contrasts with US Shortfall
Meanwhile, European imports of rare earth elements have rebounded more rapidly, underscoring a strategic divergence in China’s approach. This selective limitation implies that China continues to prioritize commercial relationships with Europe while maintaining pressure on US supply chains.
China holds about 60% of global rare earth mining and an even larger share of processing and magnet production. Its targeted limitations on US companies suggest a willingness to actively disrupt US efforts to develop a domestic supply chain. The unpredictable month-to-month export restrictions create ongoing uncertainty, complicating investment decisions and delaying an effective US response.
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