China has increased its exports of rare earth magnets, a critical component used in electric vehicles, smartphones, fighter jets, and missiles, easing recent supply disruptions for U.S. companies.
However, with Beijing still controlling about 90% of the world’s rare earth element (REE) supply, the United States continues to face a significant dependency risk.
Data from Bloomberg shows that Chinese exports of rare earth magnets jumped sharply in June. Shipments increased from 1,238 tons in May to 3,188 tons in June, while U.S. imports rose from just 46 tons in May to 353 tons in June. Despite this rebound, the volume remains below pre-restriction levels.
China had imposed export controls in April on seven key rare earth elements, disrupting global supply chains and affecting manufacturers such as Ford Motor Company. These restrictions led to a trade tension between Washington and Beijing, resulting in a temporary truce.
The U.S. government has acknowledged the strategic risk of heavy reliance on Chinese rare earths. It is actively pursuing the development of an “ex-China” supply chain to reduce dependency.
This includes increased investments in domestic rare earth production companies like MP Materials, which has recently attracted attention from both the Pentagon and private firms such as Apple.
Analysts at Morgan Stanley have highlighted the growing importance of rare earths and forecast a potential “REE revolution,” suggesting that investors could benefit from new developments in the sector.
The rare earth elements and permanent magnets they produce are essential for both civilian and defense applications, making supply security a national priority for the United States.
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