According to foreign media reports on Monday (June 30), China’s export controls have extended beyond rare earths and magnets officially designated by Beijing to include any products containing sensitive terms, as customs will block and refuse clearance for them.
Following interviews with Chinese companies and Western industry executives by the Financial Times, it was found that China’s Ministry of Commerce and customs officials are requesting additional inspections and third-party chemical testing analysis for products not listed on the original control list.
A salesperson from a Chinese magnet exporter revealed, “As long as it includes even one sensitive term (such as magnet), customs will not release it – triggering inspections that could take one to two months to complete.”
“For example, titanium rods and zirconium pipes have also been detained,” the source explained. “The actual controlled item is titanium powder. Although our titanium rods and pipes are not on the control list, they still cannot clear customs.”
As part of retaliatory measures against the US’s April tariffs, Beijing began requiring export permits for seven rare earth metals and related magnetic materials starting in April.
Another representative from a Chinese company stated that their work has been “significantly affected” as logistics companies are now “refusing to handle magnet shipments.” The company serves clients in various sectors such as magnetic separators, industrial filters, clothing, food, and chips.
“Even if the products do not contain controlled substances… they are concerned that if customs inspects this batch of goods, it may affect other items in the same container and lead to delays for the entire shipment,” the source added.
China’s export restrictions on rare earths could result in broader disruptions in the supply chain and harm the future of the US-China new trade agreement.
On June 10, both the US and China announced an agreement, with China pledging to expedite rare earth exports.
Joe Stupfel, CEO of US magnet manufacturer Dexter Magnetic Technologies, told Reuters that since April, out of the 180 permit applications submitted by the company, only 5 have been approved by Chinese authorities.
While the company serves defense clients, the permits applied for were for non-defense purposes.
“This is a lengthy delay process,” he said. “It takes 45 days to prepare the relevant documents for suppliers and another 45 days or so to obtain any permits.”
A European executive based in China, who chose to remain anonymous, stated that some companies that had obtained rare earth and related magnet export permits encountered even longer delays due to new chemical testing and analysis requirements from Chinese customs.
“It’s like a black box: you don’t know who is doing the analysis, how long it will take, and at which stage of the process we are in. It’s truly frustrating,” the individual remarked.
According to earlier reports by the Financial Times, China’s Ministry of Commerce has been requesting companies applying for rare earth export permits to provide production details and a confidential client list, raising concerns about China’s misuse of data and leakage of trade secrets.
Reuters reported that while rare earth exports from China have started flowing out, it is not free-flowing. Nils Poel, market affairs director of the European Supplier Association CLEPA, confirmed that European suppliers have received enough rare earth export permits from Beijing to prevent the widespread supply disruptions forecast earlier this month, but there are still hundreds of permits awaiting approval.
He mentioned that the speed of permit issuance for European companies in Beijing is “accelerating,” rising from 25% to 60%, but situations where the end-users are in the US or the products are shipped via third countries like India will either take longer or not be given priority.
US Treasury Secretary Bezent stated in an interview last Friday (27th) that the US is confident that rare earths and magnets will come out of China, as they have taken retaliatory measures against the Chinese by detaining some crucial materials for them.
US Commerce Secretary Howard Lutnick also signaled a similar message, stating that only when China starts supplying rare earths to the US will the US lift its retaliatory measures.