China suddenly "turns the wheel" in the rare earth war?

Reuters reported that Chinese authorities have granted export licenses to at least four rare earth magnet companies, according to sources familiar with the matter, including Volkswagen and rare earths companies. Experts say these are the first licenses issued since Beijing tightened its export controls last month, indicating that the vital materials are still flowing.

Specifically, Baotou Tianhe Magnetics, a manufacturer of rare earth magnets used in car engines, received an export license for Volkswagen in late April. Volkswagen has contacted Beijing for support in this process.

"We remain in close contact with our suppliers and have received information that some of the companies supplying magnets to Volkswagen have been granted export licenses by the Chinese government ," Volkswagen told Reuters.

Other manufacturers such as Zhongke Sanhuan, Baotou INST Magnetic and Earth-Panda Advanced Magnetic Material also said they have been granted licenses.

Experts say export licenses are issued on a customer-by-customer basis, so it is unclear whether all of the four companies' customers have been approved by Beijing.

On May 14, China's Ministry of Commerce also issued a notice on Beijing's efforts to strengthen control over rare earth smuggling and emphasized the need for the government to implement measures to protect rare earths for national security purposes, according to China Daily.

"All ministries agree that comprehensive control of strategic mineral resources is essential," China's Ministry of Commerce stressed.

Workers transport soil containing rare earth for export in Jiangsu, China (Photo: Reuters).

The licenses were approved before the US-China trade deal was announced. On May 12, US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer announced that the US and China had reached an agreement to suspend tariffs for 90 days.

In addition, the reciprocal import tariffs of both countries will simultaneously decrease by 115 basis points. Accordingly, the US will temporarily reduce import tariffs on Chinese goods from 145% to 30%. Meanwhile, China will also reduce from 125% to 10%.

Now, experts say it may be easier for US customers to get licenses approved.

Last month, China announced it would tighten exports of seven rare earth elements and related materials, including rare earth magnets, in response to US President Donald Trump’s import tariffs.

However, the fact that the country granted the license less than a month later surprised many people, as they had predicted the process would be lengthy.

China currently accounts for 90% of the global supply of rare earths, which are used in clean energy, defense and auto manufacturing. Companies have little alternative supply.

Volkswagen and several major Western corporations have been lobbying hard for the supplier to get an export license. Last month, Elon Musk said Tesla was in talks with Beijing about an export license for the material for its Optimus humanoid robot.

Source: https://dantri.com.vn/kinh-doanh/trung-quoc-dot-ngot-quay-xe-trong-cuoc-chien-dat-hiem-20250516153157992.htm