World

China’s Rare Earth Magnet Exports Dip Before New Controls: What’s Next for Global Trade?

China‘s rare earth magnet exports fell 6.1% in Sept. before expanded export controls amid U.S. trade tensions.

October 20, 2025, 9:23 AM

Close-up of raw neodymium metal. Rare earth magnets like this power the strongest, most efficient EV motors.

Raw, striated neodymium metal. This rare earth element is essential for making the strong magnets in EV electric motors. By RHJPhtotos / Shutterstock.com.

Executive Summary

China’s rare earth magnet exports declined by 6.1% in September 2025 to 5,774 metric tons, ending a three-month period of gains.

This monthly decline preceded China’s expanded export controls in October, which specifically target the defense and chip sectors.

The expanded controls were enacted amidst ongoing trade tensions with the United States and ahead of anticipated trade talks between President Xi Jinping and President Donald Trump.

The Story So Far

China, as the world’s largest supplier of rare earth magnets, has been strategically managing these critical materials amidst ongoing trade tensions with the United States. These tensions have previously led to U.S. restrictions and tariffs on Chinese imports, prompting China to expand its own export controls on rare earth elements and magnets, particularly targeting sensitive sectors like defense and chips, ahead of anticipated trade talks between President Xi Jinping and President Donald Trump.

Why This Matters

China’s recent decline in rare earth magnet exports and the expansion of its controls, particularly targeting defense and chip sectors, signals its strategic use of these critical materials as leverage amidst ongoing trade tensions with the United States, potentially intensifying global supply chain disruptions for key industries and escalating the broader economic competition between the two nations.

Who Thinks What?

China is strategically managing its critical rare earth magnet exports by expanding controls, aiming to protect its defense and chip sectors amidst ongoing trade tensions with the United States.

The United States and other importing nations are impacted by China’s expanded rare earth export controls, following the U.S.’s own previous restrictions and tariffs on Chinese imports.

China’s rare earth magnet exports experienced a 6.1% decline in September 2025 from the previous month, ending a three-month period of gains. This reduction, which saw shipments fall to 5,774 metric tons, preceded the government’s expanded export controls in October, targeting the defense and chip sectors amidst ongoing trade tensions with the United States.

Export Figures and Trends

Data from the General Administration of Customs revealed that September’s export volume was down from August’s seven-month high of 6,146 tons. Despite the monthly dip, exports in September 2025 were 17.5% higher compared to the same month in the previous year.

The monthly decline coincided with increased scrutiny on export license applications faced by Chinese rare earth magnet firms starting in September. For the first three quarters of 2025, total rare earth magnet exports reached 39,817 tons, marking a 7.5% decrease from the corresponding period in 2024.

Expanded Controls and Geopolitical Context

On October 9, following a week-long National Day holiday, China announced an expansion of its rare earth export controls. These measures were enacted ahead of anticipated trade talks between President Xi Jinping and U.S. counterpart President Donald Trump.

The United States has previously implemented various restrictions on exports to China and imposed tariffs on Chinese imports, contributing to a complex trade environment. China, the world’s largest rare earth magnet supplier, had initially announced export controls on several rare earth elements and magnets in early April.

Those initial controls led to a significant drop in exports during April and May, causing global supply shortages that impacted automakers. Exports subsequently recovered between June and August following a series of trade agreements with the European Union and the United States.

Key Export Destinations

In September, the primary destinations for Chinese rare earth magnet exports by volume included Germany, South Korea, Vietnam, the United States, and Mexico. These nations represent key markets impacted by China’s export policies.

Outlook

The recent decline in rare earth magnet exports and the expansion of controls underscore China’s strategic management of these critical materials. These actions reflect the country’s unique political system and its response to global trade dynamics, particularly in sensitive sectors like defense and technology.