China’s Ministry of Commerce has started issuing more export licenses for shipments of rare earth magnets this week, but the pace remains slow and China appears committed to the licensing requirements introduced two months ago.
Many factories in the automotive sector and other industries in Europe and the United States, and a few in Japan, are running low on the magnets. China makes 90 percent of the world’s supply of these magnets, which are essential for cars, drones, factory robots, missiles and many other technologies.
After a lengthy call on Thursday with Xi Jinping, China’s top leader, President Trump wrote on social media that the two men had discussed rare earths. Mr. Trump mentioned that rare earths were a complex subject but did not indicate whether anything had been decided about China’s strict export licensing requirement, which Beijing imposed on April 4.
The presidents agreed that their senior aides would meet soon for further discussions.
China’s statement about the call did not mention rare earths. Lin Jian, a spokesman for China’s foreign ministry, declined to answer a question about the minerals on Friday at the ministry’s daily briefing, saying that it was a matter for other agencies. On Thursday, the Ministry of Commerce said only that it would issue export licenses according to its new rules.
The American and European chambers of commerce in China each said on Friday that somewhat more export licenses had been issued in recent days. But both groups emphasized that more were needed, as the Ministry of Commerce faces a huge backlog of detailed applications for licenses.
Jens Eskelund, the president of the European Union Chamber of Commerce in China, called for more exports from China. “Our members are still struggling with the export license approval process, due to both the time it takes and the lack of transparency, and this is now negatively impacting production lines in Europe and other countries,” he said in a statement.
Michael Hart, the president of the American Chamber of Commerce in China, said that he was not aware of any change in China’s rare earth policy after the call between Mr. Trump and Mr. Xi, but expressed hope that the conversation might improve the odds that more licenses would be issued.
“It can’t hurt, the fact that both presidents were talking,” Mr. Hart said in a telephone interview.
Rare earth metals, a group of 17 elements found near the bottom of the periodic table, have a wide range of industrial applications. China produces practically the entire world’s supply of seven of the least common rare earths, including three that are crucial in making very powerful, heat-resistant magnets.
On April 4, two days after President Trump sharply increased tariffs on imports from China, China banned all exports except those approved by licenses for the seven rare earths and magnets made from them,.
Jin Canrong, a professor of international relations at Renmin University in Beijing and an influential adviser to the Chinese government, said that China did not appear to have made any concessions on rare earth supplies during or after the conversation between Mr. Trump and Mr. Xi.
“We will definitely use the rare earth card to force Trump to make concessions,” Mr. Jin wrote on his blog. “Regarding the rare earth export control policy, the Chinese leaders will not simply make any promises to Trump, and it will be handed over to the negotiation team to continue the discussion.”
Mr. Jin said that China’s rare earth export restrictions had proven more effective than he expected in putting pressure on Mr. Trump to negotiate on trade issues. “Trump specifically mentioned the rare earth issue on social media, which shows that he attaches great importance to it, and also shows that our playing this card is quite effective,” he said.
But Beijing runs the risk that global manufacturers will decide that it is too risky to depend on China for any crucial components, not just rare earths, and will more readily shift contracts to India, Vietnam, Mexico and other countries.
“We must reduce our dependencies on all countries, particularly on a number of countries like China on which we are more than 100 percent dependent,” said Stéphane Séjourné, the European commissioner for industrial strategy, at a news conference on Wednesday. “The export bans increase our will to diversify.”
On Friday, the American Chamber of Commerce in China issued the results of a survey it conducted last week. Five American industrial or technology companies said they would run out of rare earth materials and face disruption to their operations in less than a month and four more in less than three months.
Some Chinese suppliers to American companies have received licenses to export limited numbers of magnets in the next six months, but this may not meet demand, Mr. Hart said. Chinese companies appear reluctant to seek permission for large shipments because these might be diverted to American military contractors, and China is trying to cut these companies off.
Li You, Hisako Ueno and Siyi Zhao contributed research.
Keith Bradsher is the Beijing bureau chief for The Times. He previously served as bureau chief in Shanghai, Hong Kong and Detroit and as a Washington correspondent. He has lived and reported in mainland China through the pandemic.
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