In early September, three industry sources said a handful of Chinese rare‑earth producers are refusing to ship to U.S. companies. The firms say they worry about possible punishment from Beijing for complying with the United States’ Responsible Minerals Initiative due diligence requirements.
Impact on U.S. supply chains
The move comes just weeks before President Xi Jinping’s scheduled visit to Washington. U.S. officials have repeatedly urged China to honor the commitments made under the 2023 Busan agreement, which was intended to keep critical mineral exports flowing smoothly.
According to the sources, the refusals began in early August after China sanctioned the Responsible Business Alliance, a U.S. supply‑chain monitor. Other Chinese exporters have already halted shipments in recent months to avoid becoming entangled in the geopolitical dispute.
Price pressure and licensing delays
Even as overall rare‑earth exports have rebounded since April 2025, prices for strategic materials such as yttrium, indium phosphide and tungsten remain near record highs. U.S. companies in aerospace, chipmaking, medical devices and energy sectors report waiting six months or longer for mineral licences.
“China has been very effective in using rare‑earth export controls to impose restraint on the Commerce Department’s Bureau of Industry and Security,” said Reva Goujon, a geopolitical strategist at Rhodium Group.
Government response
A U.S. official, speaking anonymously, said the administration continues to press Chinese counterparts to address non‑compliance with the Busan truce and other bilateral concerns. The Treasury, U.S. Trade Representative, State Department and China’s Ministry of Commerce have not responded to requests for comment.
China’s Ministry of Foreign Affairs reiterated its commitment to maintaining global critical‑mineral supply chains, while Beijing defended its August sanctions on the RBA as a response to recent FCC restrictions targeting Chinese technology.
Regional effects
Licensing approvals appear to be improving, with several U.S. firms recently receiving permits after long waits. However, approvals for Indian and Japanese buyers remain limited, and Chinese suppliers are reportedly avoiding shipments to Japanese firms altogether.
Japanese Trade Minister Ryosei Akazawa has highlighted delays in permits and customs inspections for critical minerals, noting a sharp drop in terbium and gallium shipments to Japan compared with the previous year.
Outlook
Analysts expect Beijing may ease some controls around the upcoming summit to deflate U.S. accusations of violating the Busan truce, but the underlying tension over rare‑earth access is likely to persist as both nations vie for strategic advantage in high‑tech industries.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
