China’s November Rare Earth Suspension Has Not Restored U.S. Defense Supply Flows

China's Ministry of Commerce suspended a broad package of rare earth export controls on Nov. 7, 2025, as part of an agreement reached between President Donald Trump and Chinese President Xi Jinping at the APEC summit in Busan, South Korea ^[1][2]. The suspension, formalized through MOFCOM Announcements No. 70 and No. 72, put on hold the sweeping October 2025 controls, which had expanded licensing requirements to cover additional rare earth elements and introduced extraterritorial provisions requiring export licenses for products made anywhere in the world using Chinese-origin materials or technologies ^[3][4]. The suspension runs through November 10, 2026 ^[1][5]. Despite that commitment, independent supply chain analysts and contractors working with U.S. defense aerospace manufacturers report that material flows to American end users have not recovered to pre-restriction levels.

The gap is sharpest for yttrium, a heavy rare earth element subject to Chinese export licensing requirements first imposed in April 2025 ^[6]. China applied those initial licensing rules to seven medium and heavy rare earth elements, including terbium, dysprosium, and yttrium, in what analysts widely characterized as a retaliatory measure following Trump's Liberation Day tariffs ^[6]. Yttrium is a critical input in jet engine coatings and components, missile casings, and laser targeting systems. Kevin Michaels, managing director of AeroDynamic Advisory, a Michigan-based consultancy that works with defense aerospace contractors, told POLITICO that manufacturers have identified workaround supplies but that yttrium has not restarted flowing from Chinese sources to U.S. companies [POLITICO]. That assessment is consistent with trade data: shipments of yttrium to the United States are running at roughly 42% of pre-restriction volumes, according to research by BMI, the Fitch Group's research unit ^[7]. Chinese magnet exports to the U.S. have fallen since October 2025, according to Cory Combs of Trivium China, a Beijing-based consultancy focused on Chinese trade policy, who told POLITICO the trend appears "mostly policy influenced" rather than the result of voluntary source diversification [POLITICO].

The most recent high-level attempt to resolve the impasse, Trump's May 14-15 summit with Xi in Beijing, produced no formal rare earth agreement ^[8]. The White House fact sheet stated that China agreed to "address U.S. concerns" over supply shortages of yttrium, scandium, neodymium, and indium ^[9][10]. The Chinese readout did not mention rare earths and said only that the two governments "will jointly explore solutions" to supply concerns [POLITICO]. The divergence between the two governments' public characterizations mirrors a pattern established at the October 2025 Busan summit, where the White House announced that Beijing had committed to eliminating "current" and "proposed" export controls, while China described its action as a one-year suspension pending further negotiation ^[11][12]. BMI concluded that Xi's team had offered only a promise to address concerns "without structural extensions or concrete policy adjustments" at the May summit ^[13].

U.S. Trade Representative Jamieson Greer, speaking on Bloomberg Television on the first day of the Beijing summit, acknowledged the slow pace of implementation while stopping short of characterizing it as a breach ^[14]. "Rare earth exports from China to the United States are improving although Beijing is still slow to approve some shipments," and "China still drags its feet with some export licenses," with U.S. officials intervening on behalf of affected companies, Greer said. "I would give them a passing grade on this," he said. Neither USTR nor the White House responded to requests for comment on the state of implementation, according to POLITICO [POLITICO].

The structural context tightens the policy stakes. China accounted for roughly 60% of global rare earth mining output in 2024 and approximately 91% of global separation and refining production, with Malaysia a distant second. China's share of sintered permanent magnet production has risen from approximately 50% two decades ago to 94% today. Bradley Martin, a defense supply chain expert at the RAND Corporation, argued to POLITICO that the delayed flows are deliberate rather than bureaucratic: where there is slow-rolling, it functions as a signal of leverage, not a processing delay [POLITICO]. That assessment is supported by analysts at the Foundation for Defense of Democracies, who noted that China's decision to delay the new measures rather than cancel them showcases its desire to maintain its options in its relations with Washington.

The downstream consequences for defense procurement are time-sensitive on two independent tracks. The November 2025 truce suspension expires November 10, 2026, at which point China's October 2025 controls, including their extraterritorial provisions, are scheduled to resume absent a new agreement ^[5][15]. Separately, beginning January 1, 2027, Defense Federal Acquisition Regulation Supplement rules prohibit Department of Defense contractors from delivering covered magnets or related materials mined, refined, separated, or produced in China unless an authorized official makes a non-availability determination ^[16]. Brandon Daniels, chief executive officer of the supply chain consultancy Exiger, which works with U.S. defense manufacturers, told POLITICO that demand pressure is rising simultaneously, citing the need to rebuild munitions stockpiles and to support new administration-backed defense programs, including the proposed "Golden Dome" missile defense system [POLITICO]. Washington's rare earth vulnerability has deepened as munitions consumption has increased, and replenishing stockpiles will require heavy rare earths, which is "exactly where China holds a quasi-monopoly," according to Tom Moerenhout of Columbia University's Center on Global Energy Policy. The Pentagon did not respond to a request for comment, according to POLITICO [POLITICO].