BEIJING/SINGAPORE/WASHINGTON, September 4 (Reuters) – Chinese rare-earth suppliers are refusing to ship products to the United States for fear of reprisals from Beijing, according to three sources, underscoring how access to these materials remains a problem in the weeks ahead of President Xi Jinping’s visit to Washington.
U.S. authorities have repeatedly urged China to fulfill the commitments made in Busan and Beijing over the past year to ensure a steady flow of export licenses for rare earths. The persistence of the problem has placed it on the United States’ planning agenda ahead of Xi’s visit, scheduled for September 24, said a source familiar with the matter.
Some Chinese suppliers have refused to ship rare earths to U.S. companies since early August, when China imposed sanctions on the Responsible Business Alliance (RBA), an American body that monitors the supply chain, said another source with direct knowledge of the situation.
With Beijing wielding its own weapons of trade compliance, companies feared punishment from Beijing for complying with the Responsible Minerals Initiative (RMI) due diligence framework, a global mineral supply-chain auditing program linked to the RBA, the source said.
Other Chinese rare-earth firms had already suspended shipments to the United States in recent months to avoid getting involved in geopolitical issues, said two other sources familiar with the trade. One of them cited four cases in which Chinese companies refused to ship material for fear it could be resold to prohibited end-users.
Sources declined to be identified due to the delicacy of the matter.
Reuters could not determine the total number of Chinese suppliers who refused shipments destined for U.S. customers.
An American official, speaking on condition of anonymity, told Reuters that the government continues to press its Chinese counterparts to resolve China’s noncompliance with the Busan agreement, as well as other bilateral issues.
Restricted Supply
Although exports of many rare earths or magnets related have rebounded since China imposed restrictions in April 2025, prices of certain rare earths and critical materials, such as yttrium, indium phosphide and tungsten — which have military applications or are used in sensitive sectors, including aerospace and chip manufacturing — remain near record levels, with supply tight.
Other sectors affected by licensing delays include medical devices and energy.
Exports of yttrium to the U.S. have increased this year, but still represent only about half of the 2024 levels, despite large shipments to other countries, according to Chinese customs data. Some American companies have been waiting more than six months for mining licenses, said two of the sources, who preferred not to be identified.
“China has been very effective in using export controls on rare earths to impose restrictions on the U.S. Department of Commerce, more specifically the Bureau of Industry and Security,” said Reva Goujon, geopolitical strategist at the Rhodium Group, referring to the U.S. agency responsible for several targeted restrictions on China.
“The bottlenecks in the supply chain will gain prominence, but I expect Beijing to loosen somewhat controls on essential raw materials around the summit, in order to weaken the U.S. claims that Beijing is not honoring the Busan truce,” Goujon added.
The U.S. Treasury, the U.S. Trade Representative, the State Department and China’s Ministry of Commerce did not respond to requests for comment.
The Ministry of Foreign Affairs of China said that the country remains committed to maintaining global supply chains of critical minerals.
Beijing said that its August decision to impose sanctions on the RBA and other American auditing firms was a response to a series of restrictions by the Federal Communications Commission (FCC) dating back to December, which targeted Chinese laboratories testing electronics, drones, consumer routers, submarine cables, advanced robotics equipment and energy investors.
When U.S. authorities raised the rare-earth issue in meetings, Chinese authorities countered that FCC actions constituted a violation of the Busan agreement, said one of the sources familiar with the interaction.
However, after two months without yttrium exports, China shipped 27 tons of the material to the U.S. in July, the second-largest monthly volume since January 2025.
Several American companies also recently reported receiving several licenses after long waits, said two sources, with some predicting an uptick in approvals around the summit.
License approvals are even more limited for Indian and Japanese buyers, said two sources familiar with the matter. Chinese suppliers are largely avoiding shipping material to Japanese companies, one of them said.
Japan’s Minister of Economy, Trade and Industry, Ryosei Akazawa, had previously said that Japanese companies have faced delays in approvals and prolonged customs inspections for critical minerals, including rare earths. His ministry did not respond immediately to a request for comment on Friday.
China did not export any terbium to Japan between January and August this year, compared with 20 tons in the same months of the previous year. Gallium shipments fell 65% in the same period, while yttrium shipments dropped 98%, according to Chinese customs data. Gallium and terbium are used in small quantities in the production of high-performance rare-earth magnets.
“While the processes have been simplified, our member companies still face difficulties with implementation,” said the European Chamber of Commerce in China in a Reuters statement.
“What our members would like to see is a commitment to implementing a transparent and predictable application process that ensures reliable access to rare-earth elements.”
