China paused plans for a dramatic expansion of its rare-earths export controls, offering relief to global buyers after a tumultuous year and handing major economies more time to counter Beijing’s grip on the industry.
Export controls announced on Oct. 9 will be suspended for one year, China’s Ministry of Commerce said in a statement Thursday on its website, after Presidents Donald Trump and Xi Jinping agreed a trade truce at a meeting in Seoul.
The agreement in South Korea is the latest twist in a momentous year for rare earths, after China used its dominance over the niche but vital materials to force Trump to the negotiating table. The stand-off has spurred a major push by western economies to reduce reliance on the Asian nation.
“The narrative around Chinese control of resources won’t change just because the export controls are delayed by a year,” said David S. Abraham, a professor at Idaho’s Boise State University and an expert in rare earths. “What this does is buy more time” for the industry and officials outside China to develop a response, he said.
The Group of Seven nations are set to announce plans on Friday for an alliance on critical minerals supply aimed at challenging China’s dominance. That could include offtake and stockpiling arrangements to floor prices, effectively creating an alternative market outside China.
The one-year pause agreed by Beijing covers a wide range of proposed steps unveiled earlier this month as Trump and Xi sought to pile pressure on each other in the run-up to trade negotiations.
The planned measures included an expansion of the number of controlled rare earths from seven to twelve; applying export controls to products traded overseas that contain even tiny amounts of Chinese rare earths, or which are made using Chinese equipment; and a comprehensive ban on exports of Chinese technology or materials needed to make rare earths.
The original controls on rare earths announced by Beijing in April weren’t addressed in Thursday’s statement.