Report from Epoch Times on October 28, 2025: The closed-door negotiations between China and the United States in Malaysia have reportedly yielded preliminary results. Beijing has agreed to temporarily postpone implementing restrictions on rare earth exports in exchange for Washington holding off on imposing a new round of high tariffs. According to sources from Beijing’s foreign economic system, even with the temporary postponement of rare earth export restrictions, China can still indirectly control exports through regulating the export pace. Concurrently, the US has signed crucial mineral cooperation agreements with Australia, Malaysia, and Thailand, aiming to form a resource barrier to reduce reliance on Chinese rare earth supply.
US Treasury officials stated after the meeting that the negotiations were conducted in a “pragmatic atmosphere,” and both sides agreed to continue communication on supply chain security. The Chinese delegation during the meeting described the postponement measure as a “phased arrangement.”
Quoting an American official participating in the negotiations in Malaysia, the Financial Times reported that China has promised a “minimum of six months” for the postponement, with the possibility of extending it to “one year” after further consensus is reached. Mr. Yin, a Chinese foreign trade official, revealed to Epoch Times that the loosening of rare earth exports is merely a surface gesture, as actual control can still be exerted through approval pace, export quotas, and technological permits. He mentioned that China is accustomed to adjusting export trends flexibly, increasing supply to friendly countries and tightening to pressuring countries. “Rhythm is the best control method,” he added.
Mr. Yin also commented, “China understands the critical importance of rare earths to American manufacturing of military weapons such as fighter jets and submarines. It also knows that if one is temporarily unable to overcome this deficiency, in the future, if the US imposes sanctions on China again, it can use rare earths to control the US. The US is also aware of this.”
Chinese scholar Mr. Fang from Australia believes that China’s so-called “postponement” is a strategic ambiguity aimed at retaining policy leverage. He pointed out that this tactic was previously used during the 2010 rare earth export dispute with Japan, where exports were superficially reinstated but actual shipments controlled administratively.
While negotiations are ongoing, the US is accelerating the establishment of alternative rare earth supply systems. The White House announced on October 26 that the US has signed memorandums of understanding on crucial mineral supply and processing cooperation with Australia, Malaysia, and Thailand covering rare earth processing, reserves, and supply chain transparency.
US Department of Energy officials stated that these agreements aim to ensure alternative sources for key minerals like rare earths, lithium, and nickel to reduce reliance on a single market. Washington officials described the agreements with the three countries as “non-antagonistic” but “preventative.”
Mr. Fang suggests that the US’s move aims to establish a “multi-layered defense line” by diversifying risks through Southeast Asia and the South Pacific resource belts. Malaysia and Thailand could provide refining and transit channels while Australia dominates in raw ore supply. He stated, “Australia is already commissioning submarines from the US, so on the rare earth issue, they will fully support the US.”
The sudden classification of rare earths as strategic materials by China, leading to export restrictions, has provoked strong reactions from the European Union. From October 21 to 25, EU Trade Commissioner Chevovich, Executive Vice President Dubrovsky, and EU Commission President Von der Leyen successively urged Beijing to clarify its export policy. On the 25th, Von der Leyen announced the “RESourceEU” plan, promoting the EU to establish an independent raw material system and stating that the EU is “ready to use all tools to address supply risks.”
Xue Ting, a scholar at Tsinghua University in Beijing, analyzed that while the EU’s response is firm, their actions are still hampered by industry reliance. She stated that Europe imports 70% of its rare earths from China and will struggle to establish an independent system in the short term. She suggested that Beijing’s release of a “postponement” signal serves to both alleviate tensions and maintain policy dominance: “In fact, Xi Jinping also does not want to ruin relations with Europe; it benefits him. However, on the surface, he must appear strong. Yet, such actions often exceed his expectations.”
Xue Ting, who is well-versed in Sino-US economic negotiations, pointed out that Beijing’s move is a strategic maneuver against US tariff issues. The suspension of export restrictions is a diplomatic concession, yet the policy stance still leaves room for maneuvering. She affirmed, “Postponement does not mean revocation; once the situation turns unfavorable, Beijing can reimpose restrictions at any time.”
Numerous analysts agree that the rare earth export issue has become a strategic topic in Sino-US economic negotiations. Beijing is showcasing its influence in the global supply chain, while Washington is striving to establish a response system through multilateral cooperation. In the short term, both sides may maintain a fragile balance. Analysts believe that due to geopolitical influences, trade relations between China and the West remain fraught with uncertainties.