Strategic Pause Provides Market Relief
China has agreed to delay the introduction of further export controls on rare earth minerals by one year as part of a broader agreement reached between President Donald Trump and Chinese leader Xi Jinping, according to Cnbc. The announcement sent U.S.-listed rare earths mining stocks surging on Thursday, with Critical Metals jumping nearly 7% in premarket trading, USA Rare Earth rising around 6%, and Energy Fuels climbing 3%, according to Cnbc market data.
The agreement comes after months of escalating trade tensions that saw Trump impose minimum tariffs of 145 percent on China in early April, prompting Beijing to suspend exports of critical minerals and magnets essential for automakers, aerospace manufacturers, semiconductor companies and military contractors, according to The New York Times.
Trump Declares Victory on Critical Minerals
Following what Trump described as an "amazing meeting" with Xi in South Korea, the president declared that the "rare earth issue has been settled," according to Cnbc reporting. Speaking to reporters aboard Air Force One on October 30, 2025, Trump expressed confidence that China's decision to delay rare earths export restrictions would be "routinely extended," according to Cnbc.
The delay represents a significant development in the ongoing trade dispute between the world's two largest economies. Treasury Secretary Scott Bessent had previously indicated that "the consensus from both delegations is that neither side wanted a decoupling," according to The New York Times, yet tensions had continued to escalate with punitive measures from both sides.
Limited Progress on Supply Chain Restoration
Despite the agreement, American companies remain concerned about their access to critical Chinese supplies, according to The New York Times analysis. While Chinese authorities have restarted some shipments of rare earth minerals and magnets in recent days, these shipments have been limited, falling short of Trump administration expectations for relaxed restrictions following the May tariff rollback agreement.
China had suspended exports of a range of critical minerals and magnets in April, with the Chinese government stating it had halted shipments while drafting a new regulatory system, according to The New York Times. Beijing's export restrictions were implemented as a direct response to Trump's decision to sharply increase tariffs on China in early April, after Beijing retaliated against earlier U.S. trade measures.
Defense Sector Faces Continued Vulnerabilities
The strategic importance of rare earth elements extends far beyond commercial applications, with these materials proving crucial for advanced defense technologies used in fighter jets, submarines, missiles, radar systems and drones, according to Cnbc analysis. The vulnerability became more apparent when Beijing placed 16 U.S. entities on its export control list in October, with all but one of the 16 U.S. entities operating in defense and aerospace industries, according to Cnbc.
China's previous rare earths restrictions, announced in early April and threatening to tighten controls on October 9, remain in place despite the new delay agreement, according to Cnbc. These existing restrictions encompass seven critical rare earth elements including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, requiring Chinese companies to secure special licenses for exports.
Market Response Reflects Strategic Importance
The strong market response to the delay announcement underscores the critical nature of rare earth supply chains for American industry. Beyond the major gainers, MP Materials and NioCorp Developments were both seen around 3% higher in premarket trading, according to Cnbc market data.
The positive market reaction reflects broader concerns about supply chain security in strategic minerals. The Department of Defense has committed more than $439 million toward building domestic supply chains and heavy rare earths processing facilities since 2020, demonstrating the administration's recognition of the strategic vulnerability created by Chinese dominance in rare earth processing.
Broader Commerce Department Review Continues
While the rare earth delay provides temporary relief, the new U.S. restrictions appear to be part of a broader review within the Commerce Department of exports of strategic goods to China, according to The New York Times. The Bureau of Industry and Security, a division within the Commerce Department, continues to oversee the granting of licenses that allow companies to export products with military value or strategic importance to the United States.
Secretary of State Marco Rubio announced on Wednesday that the United States would "aggressively revoke" visas for Chinese students studying in critical fields or those with connections to the Chinese Communist Party, according to The New York Times, indicating that the administration continues to target China with punitive measures despite the recent agreement.
Looking Ahead: Temporary Relief or Lasting Solution
The one-year delay on additional rare earth export controls provides breathing room for both American companies and Chinese exporters, but questions remain about the long-term sustainability of current supply chain arrangements. China's effective monopoly over global heavy rare earths processing means that any disruption in supply poses serious threats to U.S. defense capabilities and commercial operations.
The agreement reached between Trump and Xi represents a tactical pause rather than a strategic resolution to underlying trade tensions. With China's existing April restrictions remaining in place and the Trump administration continuing its broader review of strategic exports, the rare earth supply chain remains vulnerable to future disruptions. The expectation that delays will be "routinely extended" suggests both sides recognize the mutual economic damage that could result from a complete decoupling of critical mineral supply chains, but the fundamental competition for technological and military advantage continues to drive policy decisions on both sides of the Pacific.