China is reportedly crafting a plan to block the US military from getting shipments of rare earth magnets – even as it eases restrictions on shipments to US companies making electronics and other consumer goods.
Beijing has repeatedly used its near-monopoly over rare earth metals – crucial to make everything from iPhones to military hardware like F-35 fighter jets and drones – in tense tariff talks with the Trump administration.
Beijing is planning a “validated end-user” system that fast-track shipments for approved civilian firms in the US, the Wall Street Journal reported, citing sources familiar with the plan. It would allow China’s President Xi Jinping to keep his promise to President Trump about easing exports while cutting out military contractors.
If it is enacted, the plan could cause ongoing headaches for US companies that make “dual use” products or have both civilian and military clients, such as certain automakers and aerospace companies, according to the report.
The White House did not immediately return a request for comment.
The Chinese government has yet to specify which US companies will be considered eligible for general licenses that will allow them to receive shipments of rare earths.
The “validated end-user” system is said to be modeled on US export controls.
China, which controls about 70% of global rare earth mining and about 90% of processing capabilities, has steadily cut off access in recent years amid rising tensions with the West.
Before striking a trade truce with Trump, China briefly sparked chaos in global supply chains last month by announcing foreign entities would need to obtain special licenses beginning Dec. 1 to export products containing more than 0.1% of rare earth metals and magnets originating in China.
After Trump and Xi reached a deal, China said it would delay those measures by one year.
The White House that China’s pledge to issue general licenses for exports marked the de facto end of its previous restrictions. However, Reuters reported last week that industry insiders were skeptical that China would back off as much as the administration hoped.
Meanwhile, the Trump administration has moved quickly to develop rare earth sources outside of China – through investments both inside and outside the US.
Earlier this month, Trump announced a critical minerals deal with the government of Kazakhstan. He has also stated a desire to tap into deposits located in Greenland and Ukraine.
