China-US Rare Earth Trade Tensions Persist Despite Trade Truce

Continued Restrictions on Strategic Materials

The trade tensions between China and the United States remain heated in the strategic sector of rare earth elements. Although President Donald Trump and President Xi Jinping agreed to ease supply restrictions in October 2025, the reality on the ground tells a different story. China continues to limit exports of crucial raw materials needed by the US to produce permanent magnets and various strategic technology products.

Shift to Finished Products Exports

China has chosen to increase shipments of finished products, particularly permanent magnets, while maintaining restrictions on raw materials such as dysprosium in metal form and Praseodymium-neodymium oxide. This strategy complicates US efforts to establish an independent domestic supply chain, a priority for the Trump administration. The continued restrictions on raw materials contradict Trump's assertion that the trade agreement represented a de facto lifting of restrictions.

Impact on Various Industries

The rare earth materials in question are critical for multiple industries, ranging from automotive and consumer electronics to defense systems. The ongoing limitations have significant implications for both countries' technological and industrial capabilities. The situation underscores that the trade truce reached between Trump and Xi at their meeting in South Korea on October 30, 2025, has not fully eased the underlying tensions.

Conclusion

The persistence of these trade restrictions highlights the complex nature of the China-US trade relationship, particularly in strategic sectors like rare earth. As China continues to control the supply of critical materials, the US faces challenges in securing the components necessary for advanced technology production. This ongoing situation will likely continue to affect global supply chains and technological development in the coming years.