According to the data released by the Chinese Customs, the export volume of rare earth products from China in August surged to a record high.
Based on calculations by Bloomberg using Chinese government data, in August, the export volume of rare earth products, including high-performance magnets used in consumer goods and fighter jets, increased to 7,338 tons. This marks the highest monthly export volume from China since early 2012.
In comparison, according to data from the General Administration of Customs of China, the total export volume of rare earth magnets in July reached 5,577 tons, marking the second consecutive monthly increase and setting a new monthly high since January of this year. Among them, exports to the United States reached 619 tons, a significant increase of 75.5% from the previous month and a year-on-year increase of 4.8%. Earlier, due to export approval obstacles, shipments to the U.S. in April and May had dropped to just 46 tons at one point.
China is the world’s largest producer of rare earths, and tensions surrounding rare earths have persisted for many years. Rare earths are a key driver of the digital age, with the presence of magnets seen everywhere from mobile phones to military equipment. The United States and its allies and close partners have been exploring alternative supply chains, but progress has been slow.
Earlier this year, a trade war broke out between the U.S. and China. In April, Beijing tightened control over rare earths and long restricted rare earth separation and magnet technology. Chinese magnet exports saw a sharp decline in May, but following the temporary truce in the trade war agreed upon after negotiations between the U.S. and China on May 12 to facilitate broader trade agreement talks, more Chinese companies obtained licenses in June, officials began clearing customs, and the export volume of rare earths saw a significant increase. According to Reuters, global magnet exports increased by 157% month-on-month, and it is expected that exports will further recover as more permits are issued.
On August 25, U.S. President Donald Trump once again warned that during the hiatus in U.S.-China trade tariffs, Beijing must supply magnets to the United States, otherwise “we’ll have to impose a 200% tariff or similar penalty on them.”
Jamieson Greer, the U.S. Trade Representative involved in the negotiations, stated in an interview in early August that the U.S. has received assurances from China on the supply of rare earths (magnets).
Greer said, “You may have heard that Beijing has imposed global control (on magnets), so for the United States, our focus is to ensure that magnets flow from China to the United States as they did before and that the related supply chains can flow freely as before.”
Currently, the U.S. and China have completed four rounds of high-level trade negotiations, and after the negotiations in Madrid this week, President Trump stated that he will speak with Chinese Communist Party leader Xi Jinping by phone on Friday.