China eases trade limits, rare earth restrictions linger
China has temporarily suspended export restrictions for 28 American companies following a trade agreement with the USA. However, key export restrictions concerning seven rare earth metals remain in effect.
China has decided to temporarily lift export restrictions for 28 American companies. This decision stems from a trade agreement reached with the Trump administration in Switzerland. Nonetheless, as reported by CNBC, primary export restrictions on seven rare earth metals, including samarium and gadolinium, remain in place.
According to a statement from Geneva, China agreed to suspend certain non-tariff measures imposed against the USA, effective April 2, 2025. However, restrictions on rare earth metals, which are critical to the American defense and energy industries, continue to apply.
On Wednesday, China removed 28 American companies from the export control list for a period of 90 days.
On the same day, the Chinese Ministry of Commerce issued a statement addressing the fight against the smuggling of rare earth metals and the need to control them for national security reasons.
Leverage on the American economy
China possesses key resources and technology that significantly impact the American economy. Most rare earth metals imported to the USA originate from China, which gives Beijing leverage in trade negotiations with Washington.
As highlighted in a report by the Critical Raw Materials Alliance (CRMA), China accounts for 80% of the world's gallium production and 60% of germanium production.
The disparity in potential between the USA and China is substantial. According to statistics from early January, China has 44 million metric tons of extractable rare earth metals. Following China are Vietnam (24 million metric tons) and Brazil (23 million metric tons), while the United States has access to only 2 million metric tons.
