China: Rare Earths Restrictions are On

Published on May 30, 2019

On Monday, May 20, we warned clients that China’s Premier Li Keqiang and the Political Bureau of the CPC Central Committee had given a green light the Friday before to the control of exports to the United States of “important materials such as rare earth minerals” in retaliation for the just announced ban by the Trump administration on China’s Huawei Technologies.

*** From what we understand, China has already begun the process of restricting exports of rare earth minerals to the United States, as implicitly threatened since President Xi Jinping’s politically loaded inspection of a rare earths company in Jiangxi on that same day, May 20, according to sources in Beijing. ***

*** Going forward, all companies that export rare earth minerals to the US will be required to provide detailed information to their respective local authorities, and exports to the United States will only be allowed upon explicit approval of the authorities. ***

*** Furthermore, five departments, led by the National Development and Reform Commission (NDRC), have been tasked with setting up export control and economic sanctions systems for specific products, particularly strategically important products that include not just rare earths, but also graphite and medical supplies, which China produces in bulk. ***

*** As things stand, Chinese sources expect that discussions between Presidents Xi Jinping and Donald Trump at the G20 summit in Osaka, Japan on June 28-29 will revolve around Huawei, and rare earths. Should the US continue its ban on Huawei, they expect the full ban on rare earths exports to the US to kick in immediately, starting in July. ***

Back to list