During the third round of trade negotiations between the United States and China last week, American trade representative Jamieson Greer expressed cautious optimism regarding discussions on Beijing’s rare earth export policies, stating that the negotiations are “halfway complete.”
In an episode of CBS’s “Face the Nation” on Sunday (August 3rd), Greer highlighted the importance of the negotiations in ensuring that magnets flow from China to the United States and that related supply chains can freely circulate as they did before the implementation of controls.
China’s export control over rare earths has led to soaring prices of critical materials for the defense industry, prompting the United States and its allies to accelerate efforts to diversify alternative solutions and bolster industrial chain resilience.
According to a report by The Wall Street Journal on August 3rd, despite China relaxing export controls on rare earths following the June trade talks with the United States, strict restrictions on key minerals for defense purposes remain in place.
The report mentioned a manufacturer supplying drone parts to the U.S. military that was forced to delay orders by two months due to the search for non-Chinese sources of rare earth magnets.
Additionally, Beijing’s export restrictions have led to a spike in prices of critical materials, driving up defense costs. The Pentagon has instructed defense contractors to cease purchasing rare earth magnets containing Chinese minerals by 2027.
Industry traders revealed that prices for certain materials required by the defense industry have surged to over five times the levels before China implemented mineral restrictions.
One company reported that the price of terbium, a material necessary for manufacturing fighter jet engines that can withstand extremely high temperatures, was 60 times the standard price for their most recent shipment.
Despite China tightening export controls, reports suggest that Chinese companies are circumventing regulations by transshipping antimony products through third countries.
According to Reuters, from December 2024 to April 2025, the U.S. imported 3,834 tons of antimony oxide from Thailand and Mexico, nearly surpassing the total for the previous three years. During the same period, Thailand and Mexico emerged as China’s top three antimony export markets, having not even been in the top ten exporters previously.