China Tightens Rare Earth Export Controls Again

According to a report by the Financial Times (FT), China's export control measures are quietly spreading beyond officially listed rare earths and magnets. Authorities are now requiring additional inspections and third-party chemical testing and analysis on products not included in the original control list, leading to export delays.

These extra customs checks are causing long delays that threaten to disrupt global supply chains and cast doubt on the credibility of Trump’s claim that a trade deal has been reached.

The FT, citing Chinese companies and Western industry executives, reports that officials from China’s Ministry of Commerce and Customs have begun enforcing additional scrutiny on unlisted products.

A sales representative from a Chinese magnet exporter said, “As long as a product name contains a sensitive word like ‘magnet,’ customs will block it and trigger an inspection. Once that happens, it could take one to two months.”

For instance, titanium rods and zirconium tubes are now getting stuck. The representative explained that although titanium powder is under export control, titanium rods and zirconium tubes are not—but they still fail to clear customs.

A representative from another Chinese firm stated that their business has been “heavily affected,” with logistics companies even “refusing to ship magnetic products.” This company serves clients across several industries, including magnetic separators, industrial filtration, apparel, food, and electronic components.

“Even if the product doesn’t contain any restricted substances,” the person said, “logistics firms are afraid that triggering a customs inspection could delay the entire container of goods.”

Beijing’s rare earth export controls have become a key tool for exerting leverage on trade partners. China dominates both the processing of rare earths and the production of magnets made from rare earth materials. These materials are essential in electronics, heavy machinery, and defense systems like fighter jets. On June 10, the U.S. announced it had reached an agreement with China to speed up rare earth exports.

Earlier this month, reports surfaced that China’s Ministry of Commerce has been demanding production details and confidential customer lists from companies in order to obtain export licenses for rare earths and related magnets—raising concerns over potential misuse of sensitive data and exposure of trade secrets.

Beijing has accelerated export licensing for EU-based companies, but progress remains unsatisfactory. According to a June survey of Western businesses operating in China, over 60% of respondents said their export applications had yet to be approved. An anonymous European executive in China said some companies that had received export licenses for rare earths and related magnets still encountered delays due to newly introduced customs requirements for chemical testing and analysis.

“It’s like a black box: you don’t know who’s doing the analysis, how long it will take, or where the process currently stands. It’s extremely frustrating,” the executive said.

Some license holders have opted to air freight their approved magnets rather than using sea freight. While more expensive, this approach is seen as a way to reduce the risk of being subjected to further inspection and analysis. “Our products are heavy but small in size, so we can still use fast shipping methods—though not risk-free, the checks tend to be less stringent,” said one exporter.