China indicates rare earths will keep flowing to EU, regardless of U.S. trade deal expiration

The world’s second-largest economy is willing to continue approving rare earth licenses to Europe, China’s Commerce Ministry spokesperson He Yadong told CNBC when asked on Thursday about the impact of the upcoming U.S. deadline.

Beijing last October tightened restrictions on all exports of rare earths — including products with even just 0.1% of China-sourced rare earths. The move followed a new U.S. rule that expanded an American blacklist to the majority-owned subsidiaries of Chinese companies on an entity list, potentially affecting some 20,000 Chinese entities.

However, both the U.S. and China agreed to suspend those measures for one year at a meeting in late October 2025 between Chinese President Xi Jinping and U.S. President Donald Trump. Ahead of the leaders’ latest summit last month, U.S. Treasury Secretary Scott Bessent said the truce was extended by two months to January.

Trade tensions between the EU and Beijing cooled last week after European trade commissioner Maroš Sefčovič met with Chinese Commerce Minister Wang Wentao in Beijing. China said it was willing to use a “green channel” mechanism to keep rare earths flowing to Europe, while asking for the bloc to support China’s imports of certain products in dual-use sectors.

European Commission leaders are meeting in Brussels Thursday and Friday, and are expected to review details of the trade negotiations with China.