The export of rare earth magnets from China to the United States surged in June following the resumption of trade flows after a brief but impactful trade war between Washington and Beijing.
According to a Reuters report published Sunday, shipments of rare earth magnets—crucial to the U.S. automotive and electric vehicle (EV) industries—rose more than sevenfold compared to May. China shipped 353 metric tons in June, marking a 660% increase month-over-month.
The spike in exports followed an agreement reached between U.S. and Chinese officials in London on June 10. Under the terms of the deal, China resumed exports of the key components, which had been halted in April, in exchange for the U.S. lifting certain restrictions on the export of artificial intelligence (AI) chips to China. The shortage of rare earth magnets had pushed some U.S. automakers to the brink of shutting down production.
China currently supplies over 90% of the world’s rare earth magnets, granting it substantial leverage in trade negotiations, particularly after President Donald Trump imposed 145% tariffs on a wide range of Chinese imports in April.
Despite the sharp recovery, June’s export volume remained 38% below the levels recorded in June 2024, reflecting lingering disruptions in the supply chain.
Rare earth magnets are not only vital for the auto and EV sectors but also play a key role in wind turbine production, consumer electronics, and high-tech industries such as aerospace and defense. Notably, U.S. military aircraft like the F-35 and F-22 rely on specialized samarium-cobalt magnets in their avionics and radar systems.
However, the June agreement between Washington and Beijing excluded the resumption of magnet exports for military applications. China continues to withhold supply of the specialized samarium-cobalt magnets used in U.S. defense systems—a significant sticking point in resolving broader trade disputes. Analysts estimate the U.S. relies on China for between 80% and 95% of its samarium imports.
The gap in military-grade material supply underscores the fragility of U.S. strategic supply chains and highlights the unresolved issues still straining U.S.-China trade relations.