Industry officials and market participants said the reality is different for US players.

“People aren’t getting materials out of China, you’re not getting dysprosium metal or oxide if you’re a US entity,” Scott Dunn, the chief executive of Noveon Magnetics Inc, said in an interview, citing his contacts with others in the industry. Noveon is one of just a few US makers of permanent magnets. The company doesn’t buy rare earth inputs from China, but Dunn said some of his customers do.

“Outside of China, the world can produce 50,000 tons of magnets, but there isn’t even close to the equivalent in rare earth minerals to support those tons outside of China,” Dunn said. “China restricts materials far beyond what it restricts in magnets to keep that dynamic in place.”

To be sure, Beijing’s easing of restrictions on products like magnets made from rare earths has, for the moment, removed the risk that consuming industries like autos and technology might have to shut down production, according to Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies in Washington.

“Given we import further down the supply chain, companies don’t feel that interruption nearly as much,” she said. “Because we import more magnets, the impact is much softer.”

China’s overall exports of the raw materials have risen since last year, but the US hasn’t received a similar uptick, according to government data. The stasis for US firms continues even as the European Union said Dec. 15 that China started granting licenses with lengthier terms to allow European companies to obtain rare earths.

The US and China still haven’t reached an agreement on key details of how Beijing will free up sales of rare earths, according to a person familiar with the negotiations. Bloomberg News reported last month that the two sides had given their teams until the end of November to agree on terms for so-called “general licenses” for exports. This has left market participants worried that the truce could collapse.

“We reached various temporary agreements in London, in Geneva, in South Korea and they were reneged,” Baskaran said. “So no agreement so far has proved to be final, and that gives industry a level of skittishness that’s justified.”

The looming expiration of six-month temporary export licenses China approved in early summer also means US companies will be seeking renewals at the same time, potentially creating a backlog of applications. Buyers worry that China, as it did in May and June, could slow approvals — a move industry players view as a form of export control.

“In discussions with Chinese counsel, the recommendation is to proceed with license applications before the pause expires,” said Mark Ludwikowski, the chair of Clark Hill’s international trade practice. “They could pull the plug on this at any point if this goes south.”

–With assistance from Kate Sullivan, Jing Li and Jon Herskovitz.

(Update with Chinese commerce ministry comments in seventh paragraph.)

Most Read from Bloomberg Businessweek

©2025 Bloomberg L.P.