China rare earth firms halt some US shipments over geopolitical worries

Chinese rare earth suppliers are hesitant to ship to the United States due to perceived risks of repercussions from Beijing, sources revealed. This reluctance comes amid escalating geopolitical tensions and underscores ongoing challenges in accessing critical materials for the US, weeks before President Xi Jinping's visit to Washington.

US officials have repeatedly urged China to adhere to the commitments made in the Busan and Beijing agreements of the past year to facilitate the smooth flow of rare earth export licenses. The issue has now gained attention on the US planning agenda ahead of the September 24 visit by Xi.

A few Chinese suppliers have declined to ship rare earths to US companies since early August, following China's imposition of sanctions on the Responsible Business Alliance (RBA), a US supply chain monitor. Concerns about facing punishment from Beijing for complying with the due diligence framework of the Responsible Minerals Initiative (RMI) have deterred some companies. Other suppliers have halted shipments to the US in recent months to avoid entanglement in geopolitical disputes.

Four instances have been documented where Chinese firms refused to send material, fearing it could be resold to banned users. While the total number of Chinese suppliers refusing shipments to US clients remains unknown, a US official indicated that the administration continues to urge Chinese counterparts to address China's lack of compliance with the Busan agreement and other bilateral concerns.

Although exports of some rare earths and related magnets have rebounded since April 2025, the prices of certain critical materials like yttrium, indium phosphide, and tungsten, which have military applications or are used in sensitive industries such as aerospace or chipmaking, remain near record highs with limited supply. Exports of yttrium to the US have risen this year but still account for only about half of 2024 levels despite substantial shipments to other countries according to Chinese customs data.

Some US companies have been awaiting mineral licenses for over six months, sources said, declining to identify them.