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Tangled Truce? China Loosens Rare Earths While US Tightens Nuclear Screws

The world has been on the edge concerning critical rare-earth; however what may be seen as a momentary positive, China has granted temporary export licenses to rare-earth suppliers catering to the top three U.S. automakers – General Motors, Ford, and Stellantis. 

The move comes even as the broader U.S.-China trade relationship remains fraught with escalating tit-for-tat restrictions, and suspicions linger over the strategic use of critical minerals as economic weapons.

The export approvals, valid for at least six months, arrive at a time when Beijing’s sweeping curbs on rare earth exports (announced in April) are beginning to strain global supply chains. While the exact quantities and categories covered under the licenses remain undisclosed, industry insiders suggest the decision may be a tactical softening rather than a fundamental shift in policy.

Rare earth elements, essential for EV motors, semiconductors, defense equipment, and the broader green energy transition, have become one of China’s most potent trade levers. With China controlling nearly 90% of the global rare earths supply, its April decision to clamp down on exports of these materials and related magnets sent shockwaves through the automotive and technology sectors.

China, Critical Rare-Earth

The temporary lifeline extended to Detroit’s Big Three automakers follows similar clearances recently granted to a U.S. electronics company and another unnamed U.S. firm outside the auto sector.

Stellantis confirmed efforts to work with its suppliers to streamline the licensing process and said that immediate production issues had been mitigated without significant disruption. GM and Ford however have not given any comments on this matter yet.

The developments unfold against the backdrop of heightened diplomatic exchanges. On Thursday, U.S. President Donald Trump and Chinese President Xi Jinping held a rare direct phone call aimed at easing trade frictions. Trump later stated publicly that Xi had agreed to facilitate the flow of rare earths to the U.S., claiming a “positive conclusion” to their discussion and implying that the issue’s technical complexity had been resolved – at least for now.

Yet the timing of the partial export reprieve has done little to quell doubts. Critics warn the licensing process remains opaque and burdensome, exacerbating bottlenecks for companies dependent on these materials. Ford, for instance, had to temporarily halt production of its Explorer SUV in May due to rare-earth shortages.

Beijing’s Ministry of Commerce has not responded to inquiries regarding the rationale or scope of the temporary licenses. Meanwhile, reports indicate that China has launched a tracking system for its rare earth magnet sector, a sign that it is doubling down on control and oversight amid accusations of smuggling and stockpiling.

The export green light to automakers is likely to be viewed in Washington with cautious optimism but not without skepticism.

“We have to give the Chinese the benefit of the doubt that they’re working through this. It’s up to them to show that they are not weaponizing it,” said one of the unnamed sources.

As both nations prepare for another round of trade talks in London next week, rare earths have clearly emerged as more than just industrial inputs, they are now bargaining chips in a strategic standoff.

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What Trump Said…

Meanwhile, U.S. President Donald Trump on Friday claimed a diplomatic win in the ongoing trade standoff with China, stating that President Xi Jinping has agreed to allow the flow of rare earth minerals and magnets to the United States, a development that could temporarily ease frictions between the two global economic powerhouses.

Speaking aboard Air Force One, Trump confirmed the concession when asked by a reporter if Xi had agreed to resume exports: “Yes, he did.” The remark followed a rare high-level phone call between the two leaders, aimed at de-escalating weeks of mounting tensions surrounding critical mineral supply chains.

The diplomatic overture follows the May 12 Geneva accord, where both nations agreed to suspend the bulk of retaliatory triple-digit tariffs for 90 days. The truce initially calmed financial markets rattled by the intensifying trade hostilities. Yet the relief has proven short-lived. In April, China abruptly imposed a wide-ranging suspension on exports of critical minerals and magnets, severely impacting global supply chains integral to the automotive, semiconductor, and defense sectors.

In response, the Trump administration accused Beijing of violating the Geneva pact and imposed new curbs on chip-design software and other strategic exports to China moves that prompted sharp rebukes from Beijing and threats of retaliatory measures.

Rare earths and associated critical minerals have emerged as powerful levers in Beijing’s arsenal, especially as the U.S. faces mounting domestic pressure to secure supplies vital to advanced manufacturing and clean energy infrastructure. With China producing nearly 90% of the world’s rare earth elements, any disruption exposes significant vulnerabilities in the U.S. industrial base.

Since his return to the White House in January, Trump has adopted a mercurial stance toward trade – issuing threats of sweeping punitive actions, only to backpedal or modify them in rapid succession. This erratic pattern has left global markets jittery and U.S. corporate leaders seeking clarity amid policy whiplash.

US suspends nuclear equipment exports to China amid escalating trade war: Report - India Today

Washington Escalates Trade Offensive with Suspension of U.S. Nuclear Equipment Exports to China?

Amid the critical rare-earth conundrum, and negotiations on the table, in a significant escalation of the U.S.-China trade confrontation, the United States has suspended export licenses for American nuclear equipment suppliers selling to Chinese power plants.

The move, executed over the past several days by the U.S. Department of Commerce, directly targets shipments of nuclear parts and technology, widening the scope of Washington’s pressure campaign beyond critical minerals and into the highly sensitive domain of civilian nuclear energy.

These suspensions, conveyed to companies via official communication, come amid a broader strategy shift in the trade war – one that now appears focused less on tariffs and more on weaponizing choke points in global supply chains. The latest action casts fresh uncertainty on the fragile 90-day tariff rollback agreement reached between Washington and Beijing on May 12 in Geneva, which aimed to de-escalate months of economic hostility. However, mutual recriminations over the terms of that truce have all but derailed progress.

It remains unclear whether the recent high-level phone call between U.S. President Donald Trump and Chinese President Xi Jinping – held on Thursday in an attempt to defuse tensions – has any bearing on the Commerce Department’s decision. What is evident, however, is that Washington has intensified its scrutiny over strategic exports to China.

A Commerce Department spokesperson, commenting earlier on May 28, stated the department is “reviewing exports of strategic significance to China.” The spokesperson further added that in some instances, “Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending.”

Among the affected firms are U.S. nuclear giants such as Westinghouse Electric, whose reactor technologies underpin over 400 installations globally, and Emerson Electric Co., a key provider of nuclear measurement and automation tools. Both companies declined to comment.

The suspended licenses are believed to involve contracts worth hundreds of millions of dollars, showcasing the economic magnitude of the latest clampdown.

Responding to the developments, a spokesperson for the Chinese Embassy in Washington emphasized President Xi’s position during his call with Trump: that both nations must “earnestly implement the Geneva agreement.” The embassy urged the U.S. to “acknowledge the progress already made and remove the negative measures taken against China,” asserting that Beijing’s rare earth controls were in line with global norms and “not targeted at any specific country.”

Over the past two weeks, the U.S. has imposed or modified export licensing requirements on a growing number of categories.

These include:

—Hydraulic fluids sold to Chinese buyers.

—Jet engine components destined for China’s COMAC aircraft, reportedly affecting GE Aerospace.

—Energy commodities, including ethane and butane shipments. Houston-based Enterprise Product Partners disclosed that its emergency request to ship 2.2 million barrels of ethane to China was denied. Dallas-based Energy Transfer confirmed it too had been notified of new licensing rules.

Simultaneously, restrictions have extended into the digital sphere, with licensing curbs now targeting electronic design automation (EDA) software companies, including industry heavyweight Cadence Design Systems.

The strategic calculus behind these moves is clear – Washington is tightening the screws on China’s access to advanced technologies and materials that underpin its long-term economic and geopolitical ambitions. As the two powers prepare for a new round of talks scheduled for June 9 in London, the latest wave of restrictions signals that the U.S. is willing to expand the battleground far beyond tariff skirmishes, deep into the foundational structures of global supply and security architectures.

China seeks to leave Trump twisting in the wind

The Last Bit, The Pendulum 

What’s unfolding between the United States and China is no longer just a trade spat, it’s a meticulously choreographed power play where rare earths and nuclear parts are no longer commodities but coercive instruments in a geopolitical duel. While Beijing’s decision to grant temporary export licenses for rare earth supplies to Detroit’s auto giants offers a flicker of diplomatic softening, Washington’s counter-move to suspend nuclear technology exports sends a message that any thaw will come on America’s terms – or not at all.
President Trump’s declaration of a “positive conclusion” with Xi Jinping over rare earths may offer temporary reassurance to industries starved of critical inputs. But it’s hard to ignore the glaring contradictions. On one hand, Beijing dangles concessions for auto manufacturers; on the other, Washington tightens the screws on China’s nuclear ambitions and high-tech sectors. What appears to be a handshake in one domain is matched with a hammer in another.
As the June 9 trade talks in London loom, both nations seem locked in a standoff where gestures of goodwill are transactional, tactical, and possibly short-lived. The Geneva truce is fraying under the weight of mutual suspicion, opaque enforcement, and the relentless weaponization of supply chains.
From chip design software and jet engine parts to energy commodities and electronic systems, the trade war is morphing into a systemic struggle for strategic advantage. The U.S. is no longer just defending its turf, it’s redrawing the entire map of permissible engagement with China across critical sectors.
For businesses caught in the crosshairs, the message is unsettling but increasingly clear: agility and contingency are no longer optional—they’re existential. Meanwhile, for global markets and diplomatic observers, the question remains whether these flickers of cooperation will evolve into a sustainable reset or simply foreshadow the next chapter of confrontation.
In this tangled web of temporary licenses and tightened screws, one thing is certain—rare earths may be flowing again, but trust isn’t.

 

 

 

 

 

 

naveenika

They say the pen is mightier than the sword, and I wholeheartedly believe this to be true. As a seasoned writer with a talent for uncovering the deeper truths behind seemingly simple news, I aim to offer insightful and thought-provoking reports. Through my opinion pieces, I attempt to communicate compelling information that not only informs but also engages and empowers my readers. With a passion for detail and a commitment to uncovering untold stories, my goal is to provide value and clarity in a world that is over-bombarded with information and data.

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