Ten days after the Trump-Xi Beijing summit closed with warm rhetoric and modest commitments, manufacturers who depend on rare earths remain in a structurally unchanged position: China's original April 2025 export licensing requirements for seven heavy rare earth elements have never been suspended, and Chinese customs data shows exports of yttrium, dysprosium, and terbium running approximately 50 percent below their pre-restriction baseline, with no concrete timetable for normalization.
The general licenses that China's Ministry of Commerce (MOFCOM) began issuing in December 2025 to approved Chinese exporters have eased throughput for civilian commercial customers — but they supplement, rather than replace, the broader control framework. Defense and aerospace applications remain explicitly off-limits; the White House's claim that those licenses represent the "de facto removal" of controls is a description Beijing's official communications have not confirmed. The gap between Washington's account of what was agreed and Beijing's is not a translation problem. It is a policy one.
Looming over all of it: the agreement that suspended the more sweeping October 2025 controls expires in November 2026. If it lapses without an extension — or if geopolitical conditions deteriorate before then — the International Energy Agency estimates that $6.5 trillion in annual economic activity outside China could be at risk from a full reimplementation, with the automotive and electronics sectors most exposed.
China's April Controls: What Was Never Settled
When Trump declared after the October 2025 Busan summit that rare earths were "settled" and that there is "no roadblock at all," he was describing the suspension of the October 9, 2025 expansion — a second wave of controls covering five additional elements and extraterritorial provisions for any product containing Chinese-origin rare earth content. Through MOFCOM Announcements No. 70 and No. 72, Beijing suspended those October measures for one year and restored dual-use exports of gallium, germanium, antimony, and graphite to its standard licensing framework. That is what the White House described as de facto deregulation.
What those announcements did not touch was MOFCOM Announcement No. 18 (2025), issued on April 4 — the original seven-element licensing regime covering samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, along with related compounds, metals, alloys, and permanent magnets. That framework remains fully in force. Exporters of those materials still require case-by-case MOFCOM approval for every shipment, a process that trade lawyers and industry analysts describe as a meaningful brake on supply — not because licenses are always refused, but because the uncertainty and delay they introduce are real costs that compound throughout a supply chain.
What General Licenses Actually Do
The general license mechanism, which began with approvals issued to three Chinese manufacturers — JL MAG Rare-Earth, Beijing Zhong Ke San Huan High-Tech, and Yunsheng Group — in December 2025, allows those pre-approved producers to ship specified rare earth products to pre-cleared customers under a year-long standing permit, replacing the per-shipment application process for qualifying transactions.
The practical effect is real for commercial automotive and electronics supply chains where those three firms are key suppliers. For manufacturers in defense or aerospace, or for customers of the hundreds of smaller Chinese rare earth producers not yet approved for general licensing status, conditions are materially unchanged. A December 2025 survey by the EU Chamber of Commerce in China found that most respondents had already been, or expected to be, affected by the control regime — and European Commission trade chief Maros Sefcovic cautioned that industry needed "a little bit more granular information to evaluate the whole process" even as the first licenses appeared.
The framework also retains a politically significant asymmetry: MOFCOM has explicitly stated that export applications will not be approved for overseas military end-users, and that applications related to advanced semiconductors will be handled case-by-case. The licensing system Beijing built in April 2025 is not a temporary trade-war measure. It is a permanent instrument of strategic allocation, with civilian trade treated as the default and defense and advanced technology treated as discretionary.
Are China's Rare Earth Export Controls Still in Place?
Yes — and understanding which layer applies to which products matters for manufacturers making procurement decisions now.
The October 2025 controls — covering five additional rare earth elements and the extraterritorial provisions on products made with Chinese-origin content — are suspended until November 10, 2026. That is the clause that gives the current relief window its expiry date.
The April 2025 controls — covering the original seven heavy rare earth elements and their derivatives — have never been suspended. They are operative, and they govern the materials most critical for high-performance permanent magnets: dysprosium and terbium for heat-resistant motor applications; yttrium for aerospace turbine blade coatings; scandium for high-strength aluminum alloys used in aerospace.
CSIS research published in May 2026 — one year after the April controls went into effect — shows yttrium exports to the United States fell from over 333 metric tons in the eight months before the April restrictions to just 17 metric tons over the eight months after, with aerospace manufacturers reporting shortages and rationing of the material critical for turbine blade coatings. Gracelin Baskaran, who directs the Critical Minerals Security Program at the Center for Strategic and International Studies, put the structural problem plainly: "The U.S. still has to tread carefully in its relationship with China to avoid those disruptions, given how long it takes to transform rare-earth announcements, funding, and partnerships into actual supply."
November 2026: What the Expiry Deadline Actually Means
The suspension of the October controls expires on November 10, 2026 — less than six months away. If that suspension lapses, the extraterritorial provisions return: any product manufactured outside China that incorporates Chinese-origin rare earth materials, or that was produced using Chinese rare earth technologies, would again require a MOFCOM export license. That scope encompasses a significant portion of the global magnet and rare earth supply chain, not just Chinese-origin raw materials.
The IEA's April 2026 report — the most current independent assessment of the situation, prepared in support of France's G7 presidency — places the full-implementation risk at $6.5 trillion annually in at-risk economic output for countries outside China. The United States and Europe face the greatest direct exposure, with potential losses in the automotive sector alone exceeding $3 trillion. Demand for magnet rare earths is projected to grow more than 30 percent by 2030, while supply diversification remains significantly behind schedule.
The May 2026 Beijing summit produced a White House post-summit fact sheet acknowledging that China would "address" US concerns regarding rare earth shortages — specifically citing yttrium, scandium, neodymium, and indium. China's official MOFCOM statement did not mention rare earths. That bilateral asymmetry — first observed after the October 2025 Busan summit — has now appeared twice in succession.
Diversification Race Against a Diplomatic Clock
Investment in non-China rare earth capacity is accelerating, but every credible analysis concludes it cannot replace Chinese supply before the November 2026 deadline — or for several years thereafter.
The Department of Defense has committed $400 million to MP Materials, the only currently integrated US mine-to-magnet producer, which also signed a $500 million long-term supply agreement with Apple in July 2025. MP Materials produced a record 2,599 metric tons of neodymium-praseodymium oxide in 2025 — a 101 percent increase year over year — but the company remains unprofitable and is at the beginning of its magnet manufacturing ramp-up.
For dysprosium and terbium — the two elements most critical for high-performance defense and EV magnets and the ones China has most aggressively restricted — McKinsey, CRU Group, and Benchmark Mineral Intelligence all project that non-China supply will still meet less than one-fifth of global demand by 2035. Lynas Rare Earths became the first company outside China to produce commercial quantities of dysprosium oxide at its Malaysia facility in May 2025, a genuine supply-chain milestone — but its quarterly output of dysprosium and terbium combined runs in the range of eight metric tons at current scale.
Australia, which attracted roughly 45 percent of global rare earth exploration investment in 2024 and hosts 89 active projects, is scaling midstream capacity with government-backed financing. But building mines and processing facilities takes years regardless of political will, a lesson Trump's first term already demonstrated.
Baskaran offered a pointed warning using Japan as a reference: the country has invested in rare earth resilience for 15 years following China's 2010 embargo against Japanese buyers — and "they still remain highly impacted by Chinese export controls."
What Manufacturers Should Do Before November 2026
Trade lawyers and supply chain advisors are aligned on the practical response to the current window, regardless of how the diplomatic picture evolves.
Map Chinese-origin content now. MOFCOM's control framework applies to products containing Chinese-origin materials at a 0.1 percent threshold. Supply chain audits that stop at tier-one suppliers will miss exposure at tier two and below. End-use documentation prepared now is more credible than documentation prepared under time pressure if controls escalate.
Apply for general licenses while conditions are favorable. The current review environment, with suspensions in place, is more permissive than it may be in late 2026. Companies that qualify for general license treatment should pursue it now rather than waiting for the deadline to concentrate attention.
Continue diversification regardless of diplomatic outcomes. The CSIS one-year assessment of the April 2025 controls identified a structural pattern: "Even if China continues to suspend its export restrictions going into 2027, it is not a reliable export partner to the United States during times of heightened geopolitical tensions." A supply chain that is single-source dependent on Chinese rare earths remains structurally exposed whether or not the November 2026 suspension is extended.
The general licenses and the truce are real relief. They are not a resolution. The April 2025 controls are still in force. The November 2026 deadline is real. The IEA's $6.5 trillion risk figure is the agency's assessment of what full reimplementation of existing controls would cost the global economy annually. Manufacturers who treat the current window as evidence that the problem is solved — rather than as time to prepare for the next escalation — are making a costly assumption on behalf of their shareholders.
Frequently Asked Questions
Are China's rare earth export controls still in place in 2026?
Yes. China's April 2025 controls on seven heavy rare earth elements — including dysprosium, terbium, yttrium, and scandium — remain fully active as of May 2026. A separate, more sweeping set of controls announced in October 2025 was suspended for one year as part of the US-China trade truce, but that suspension expires in November 2026. General licenses issued to certain Chinese exporters have eased throughput for pre-approved civilian customers, but the licensing architecture itself remains in place.
What is a rare earth general license from China?
A general license issued by China's Ministry of Commerce allows an approved Chinese exporter to ship specified rare earth products to pre-cleared customers under a multi-shipment, year-long permit, rather than applying for MOFCOM approval on every individual shipment. The first batch went to three major Chinese magnet makers — JL MAG, San Huan, and Yunsheng — in December 2025. General licenses do not apply to defense or aerospace end-users, which are explicitly prohibited from receiving approvals under current rules.
How are China's rare earth restrictions affecting manufacturers?
According to CSIS data published in May 2026, yttrium exports from China to the United States totaled just 17 metric tons over the eight months after the April 2025 controls took effect, compared with 333 metric tons in the eight months prior. Aerospace manufacturers have reported shortages and rationing of yttrium, which is used to protect turbine blades from extreme heat. The IEA found that, if the full suite of China's controls were reimplemented, up to $6.5 trillion in annual economic output outside China would be at risk, with the automotive and electronics sectors most exposed.
What happens when the US-China rare earth truce expires in November 2026?
If the suspension of China's October 2025 controls is not extended, those controls — which cover five additional rare earth elements and include extraterritorial provisions requiring export licenses for any product worldwide that contains Chinese-origin rare earth content at a 0.1 percent threshold — would automatically resume. The April 2025 controls would continue alongside them. The White House and Beijing have each acknowledged the November 2026 date, but the May 2026 Beijing summit produced no publicly confirmed commitment to extend the suspension.
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