China offers limited rare earth relief as US supply concerns persist

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The White House said China has agreed to address US concerns over shortages of rare earths and critical minerals following last week’s leaders’ summit in Beijing, although existing Chinese export controls are expected to remain in place.

Washington did not call for the removal of restrictions that have disrupted supply chains linked to aerospace, semiconductor and advanced manufacturing industries in the United States. 

China introduced tighter export controls on several rare earths and critical minerals in April 2025 following tariff measures announced by US President Donald Trump.

According to the White House summary released after the summit, China agreed to address concerns related to shortages of minerals including yttrium, scandium and indium, which are used in high-tech and strategic manufacturing applications.

The statement also referenced concerns over restrictions tied to rare earth processing technologies, an area where China maintains global dominance.

However, China’s Ministry of Commerce did not mention rare earths in its own summary of the discussions, highlighting continuing differences between the two sides over how the issue is being presented publicly.

Analysts said the latest agreement suggests Washington is increasingly acknowledging that China’s export-control regime for critical minerals is unlikely to disappear entirely.

Cory Combs, associate director at Trivium China, said the outcome was not ideal for the United States but still reflected a shared interest in maintaining stability between the two countries.

Also read: Assam pushes rare earth exploration with focus on sustainable mining

Export delays persist for strategic industries 

Rare earth export licences are reportedly continuing to flow to sectors such as consumer electronics and automotive manufacturing, although delays remain for industries linked to military or strategic applications.

Reuters previously reported that shortages of yttrium and scandium had affected parts of the US aerospace and semiconductor industries. Yttrium is used in heat-resistant coatings for aircraft engines, while scandium plays a role in chip manufacturing.

Indium restrictions raise concerns for AI and chip supply chains 

The White House also highlighted indium, which appeared for the first time in official U.S. messaging on the issue. China added indium to its export control list in early 2025.

Indium and its compounds are used in products including photonic chips, optical communication systems, LED displays and high-speed optical lasers tied to AI data centres and next-generation 6G networks.

Industry observers noted that Chinese indium exports have fallen sharply since the controls were introduced, with shipments to the United States reportedly dropping by around 77 per cent.

Coherent, which holds a major share of the global market for indium phosphide optical components, was among the companies represented during the US delegation’s visit to Beijing.

Paul Triolo said slower or politically dependent licensing approvals from China could create supply challenges and higher costs for companies involved in advanced chip and AI infrastructure projects.

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