China will keep approving rare earth export licences for Europe even if its trade truce with the United States is not extended past January, a Commerce Ministry spokesperson told CNBC on Thursday.
At a glance
- China's broad rare earth export curbs from last October remain suspended under its truce with the US.
- The truce was extended by two months to January, US Treasury Secretary Scott Bessent said.
- European Commission leaders are meeting this week to review the details of trade talks with China.
Background
Rare earths such as neodymium are used to make the powerful magnets in electric vehicle motors, wind turbines and defence equipment. Beijing requires export licences for them, so its licensing decisions affect how easily European and American manufacturers can get supply.
What happened
China is willing to keep approving rare earth export licences for Europe, Commerce Ministry spokesperson He Yadong told CNBC on Thursday. He was asked about the impact of an upcoming US deadline. His answer means European supply should not depend on whether Beijing's trade deal with Washington is extended past January.
The comments follow a meeting last week in Beijing between EU trade commissioner Maroš Šefčovič and Chinese Commerce Minister Wang Wentao. China then said it was willing to use a "green channel" to keep rare earths flowing to Europe. In return, it asked the EU to support China's imports of certain products in dual-use sectors.
Why the US deadline matters
Last October, Beijing tightened restrictions on all rare earth exports, even products containing just 0.1% of China-sourced rare earths. That move answered a new US rule extending an American blacklist to majority-owned subsidiaries of Chinese companies on its entity list, potentially affecting about 20,000 entities.
Both sides suspended those measures for a year after Presidents Xi Jinping and Donald Trump met in late October 2025. Ahead of the leaders' summit last month, Bessent said the truce had been extended by two months to January. If it lapses, China's wider export curbs could return.
What it means
For European carmakers and magnet users, the statement offers some reassurance that supply will not be caught up in the US dispute. It does not remove the licensing system itself, which still gives Beijing control over each shipment. European Commission leaders are meeting in Brussels on Thursday and Friday to review the trade negotiations with China.
Our read
Outlook: neutral. Steady licences for Europe ease one supply worry, but the licensing system and the US deadline keep uncertainty high.
What to watch
- Whether the US-China trade truce is extended again before its January deadline.
- The outcome of the European Commission's review of trade talks with China.
- How quickly China approves licences for European buyers under the "green channel".
For information only, not investment advice.
Neodymium price in India
metalscost.com India reference price as of 2026-10-16.
Detailed analysis
Timeline
- 2026-10-15: China's Commerce Ministry tells CNBC rare earth licences for Europe will continue regardless of the US truce.
Government Policies
Export licences remain Beijing's tool for controlling who receives rare earths and on what terms.
Trade Tariffs
China asked the EU to support its imports of some dual-use products in return for steady supply.
Geopolitical Risks
China is separating its rare earth policy toward Europe from its dispute with the United States.
What could lift prices
- A lapse of the US truce in January could bring back China's broad export curbs.
- China still controls every shipment through its licence system.
What could weigh on prices
- Steady licences for Europe reduce fears of a supply squeeze for European buyers.
- A "green channel" could speed deliveries to European manufacturers.
Country impact
| Country | Impact | Reason |
|---|---|---|
| China | High | Beijing is using rare earth export licences as a tool in its trade talks. |
| United States | Medium | The January truce deadline still decides whether broad Chinese curbs return. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Automotive | Positive | European carmakers get more certainty over magnet supply. |
Who gains, who loses
- European magnet users: They have a clearer path to Chinese rare earth supply.
- US manufacturers: Their supply still depends on a truce due to end in January.
Other ways this could play out
- If the US truce is extended, rare earth flows to both regions could stay steady.
- If the EU refuses China's dual-use requests, Beijing could slow European licences.
Price risks
- A collapse of the US truce could tighten global rare earth supply quickly.
- Slow licence approvals could still hold up deliveries despite the promise.
Technical view
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Computed from metalscost.com's own stored price history.
China
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