Rare Earth Supply Shock: Chinese Firms Halt Some US Shipments Amid Tensions

Several Chinese suppliers have halted or refused shipments to American companies in recent months, according to the report. Some companies have become particularly cautious since China imposed sanctions in August on the US-based Responsible Business Alliance (RBA), a supply-chain monitoring group.

The suppliers fear that complying with due-diligence requirements linked to the RBA could expose them to action from Chinese authorities, Reuters reported.

Other Chinese rare earth companies had already stopped shipments to US buyers to avoid becoming caught up in geopolitical tensions. One source cited four cases in which Chinese firms declined to send material because they feared it could eventually be resold to customers subject to restrictions.

Rare earth supply remains tight

The developments come despite some recovery in Chinese exports of rare earths and related magnets after Beijing imposed restrictions in April 2025.

Supplies of some critical materials, however, remain tight. Prices of yttrium, indium phosphide and tungsten remain near record levels. These materials have applications in sensitive industries such as aerospace, semiconductors and defence.

US companies have also faced lengthy waits for export licences. Some firms have been waiting more than six months for approvals, according to sources cited by Reuters.

US officials continue to press China to honour commitments reached in Busan and Beijing aimed at ensuring a smoother flow of rare earth export licences.

Some shipments resume

There are signs that China has eased restrictions on certain shipments.

China exported 27 tonnes of yttrium to the US in July after two months without shipments, marking the second-highest monthly shipment since January 2025, Reuters reported. Several US companies expect approvals to increase ahead of Xi’s planned September 24 visit to Washington.

Reva Goujon, a geopolitical strategist at Rhodium Group, told Reuters that China had been effective in using rare earth export controls as leverage against the US.

Meanwhile, Chinese suppliers are also restricting shipments to other markets. Japan received no terbium from China between January and August, compared with 20 tonnes during the same period last year. Gallium shipments to Japan fell 65 per cent, while yttrium exports plunged 98 per cent.

China has said it remains committed to maintaining stable global critical-mineral supply chains, while arguing that its sanctions against US auditing firms were a response to American restrictions on Chinese companies and technology.

The shipment refusals, prolonged export licence delays and continued restrictions on key materials underscore the uncertainty surrounding critical mineral supplies as the US and China approach Xi Jinping’s planned September 24 visit to Washington.