China’s rare earth magnet exports to US plunge 29% as tensions simmer

The decline in China’s exports of rare earth magnets to the United States accelerated in September – a period predating Beijing’s expansion of controls over the flow of the critical minerals – an indication the prized items remain a major battleground in the ongoing trade war between the world’s two largest economies.

China’s total exports to the US of the permanent magnets – essential components in manufacturing for several hi-tech industries, including electric vehicles and defence – reached 420.5 tonnes last month, down 28.7 per cent from August, according to data released by Beijing’s General Administration of Customs on Monday.

Shipments to the US from China have now fallen for two consecutive months, breaking a brief recovery that started in June, when Beijing agreed to expedite rare earth export permits for shipments to American end users during negotiations with Washington in London.

On a year-on-year basis, rare earth magnet shipments to the US were also down by 29.5 per cent in September, after falling 11.9 per cent in August, according to the data released on Monday.

The US was the fourth-largest recipient of Chinese rare earth magnets last month – after Germany, South Korea and Vietnam – down from second in August and accounting for 7.3 per cent of total exports in volume terms.

China’s global dominance in rare earth processing makes it the world’s largest supplier of rare earth magnets. Beijing has increasingly used this status as leverage in its negotiations with Washington since a trade war between the two sides reignited earlier this year.

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