U.S. Companies Shift Suppliers as China Mineral Controls Persist

The U.S.-China Business Council reports that American companies are struggling to obtain critical minerals from China due to persistent export controls and licensing delays. This volatility occurs despite an October agreement between Donald Trump and Xi Jinping to eliminate these restrictions. The council's survey indicates that 76% of impacted companies are now actively seeking non-Chinese suppliers or shifting their procurement entirely.

American firms are experiencing particular difficulty accessing cadmium, yttrium, and samarium cobalt magnets, which are essential for the aerospace and defense sectors. These supply chain disruptions follow the Government of China's decision to introduce rare earth export controls in April 2025 as retaliation for U.S. tariffs.

Corporate confidence in the region has declined, with only 49% of surveyed companies planning to invest in China this year. This trend is driven by a deteriorating business environment and the preferential treatment China provides to its domestic firms. Sean Stein, president of the council, noted that China's actions are forcing a corporate diversification that the Trump administration cannot solve alone.