When Trump announced China would resume rare earth exports after meeting with Xi Jinping at the APEC summit in Busan this October, it sounded like a major win. China agreed to suspend new export controls that were set to kick in November 8. Trump also promised lower U.S. tariffs and more Chinese purchases of American agricultural products. Problem solved, right?
The deal sounded like a breakthrough—suspended export controls, lower tariffs, more trade. But was it really solved?
Not quite.
Here's the catch: China only suspended the new controls announced in October, not the stricter ones already in place since April. The October measures would've expanded restrictions to five more rare earth elements and slapped on extraterritorial provisions requiring export licenses for products using Chinese-origin materials, even if processed abroad. That suspension is temporary, not permanent. China's Ministry of Commerce made that crystal clear.
So what's still restricted? A lot. Key strategic materials still face export licensing from those April controls. That means shipment delays, bureaucratic hurdles, and ongoing supply chain headaches. China controls about 60 to 70 percent of global rare earth mining and a whopping 85 to 90 percent of refining. They've used this leverage before—remember 2010 and 2020?
Rare earths are critical for everything from smartphones to electric vehicles to defense systems. Global demand is expected to hit 500,000 tonnes by 2030, up from around 350,000 tonnes in 2024. The market value could double from $13 billion to $25 billion in that timeframe.
The U.S. isn't sitting idle. Trump signed new rare earth agreements with Japan and several Southeast Asian countries in October. Vietnam, Malaysia, Indonesia, and Thailand are becoming key players in alternative supply chains. The U.S. currently produces 12 percent of global rare earth ore but relies on China for most refining.
But here's the reality: Japan is still 65 percent reliant on China despite these new deals. Building refining capacity takes time. Strategic stockpiles take money. And China can reimpose or adjust export controls whenever negotiations go south. Similar to how Bank Al-Maghrib manages the dirham through regulatory frameworks and intervention strategies, China uses export controls as a strategic policy instrument to protect its economic interests. Just as central banks like SARB use policy decisions to influence currency markets, China leverages export policy as a strategic tool in global economic negotiations. The suspension provides temporary relief and groundwork for broader negotiations, while many controls and licensing requirements remain in place.
The suspension buys time, sure. But calling rare earth exports “open and free”? That's a stretch.
