China Eases Rare‑Earth Export Rules After US‑China Trade Truce

Background: The US‑China Trade Truce

In late October 2025, President Donald Trump and President Xi Jinping announced a trade truce that has, so far, appeared to hold. The agreement was a response to escalating tensions over rare‑earth exports that had disrupted supply chains for electric vehicles, robotics, and defense equipment. The truce has already begun to influence the flow of critical minerals between China and Western markets.

China’s Licensing Reform

Earlier this month, Beijing started approving a new category of rare‑earth export licenses known as *general licenses*. These permits are valid for up to a year and allow pre‑approved buyers to ship rare‑earths repeatedly without the extensive paperwork that characterized the previous system. The shift from a highly bureaucratic process introduced in April to a more streamlined approach is intended to reduce administrative burdens and accelerate deliveries.

• **Approval rate**: Since the April changes, China has granted roughly 70% of license applications, compared with about 50% before the reforms.
• **Scope**: General licenses cover a wide range of rare‑earth elements used in advanced technologies.
• **Validity**: Licenses remain in force for a year, simplifying repeat shipments.

EU’s Push for General Licenses

EU trade chief Maros Sefcovic told Bloomberg TV that industry chatter suggests China is issuing these general licenses. He explained that the EU is actively seeking such permits to enable pre‑approved buyers to make repeated shipments, thereby cutting down on paperwork and delays. Sefcovic noted that while initial reports are encouraging, more granular data is required to fully evaluate the new process.

> *Sefcovic said the EU’s efforts to secure general licenses are being welcomed, but a detailed assessment is still needed to understand the full impact of the reforms.*

He also highlighted that the idea of general licenses was well received by the EU, and that the Chinese side appeared receptive to arguments that the April‑initiated process was overly bureaucratic.

Impact on Global Supply Chains

China’s dominance in the rare‑earth market has long been a bargaining chip in trade negotiations. By easing export restrictions, Beijing signals a willingness to cooperate with Western partners and to support the rebuilding of alternative supply chains. The move is particularly significant for industries that rely on rare‑earths for high‑tech components, including electric vehicle batteries, aircraft systems, and military hardware.

The policy shift is expected to:

• **Reduce lead times** for rare‑earth procurement.
• **Lower logistical costs** by minimizing paperwork.
• **Stabilize supply** for key sectors that have been vulnerable to export bottlenecks.

Other Market Developments

While the focus remains on rare‑earth licensing, other market headlines are also shaping the energy landscape. FTSE 100 oil major BP has announced a change in leadership, replacing CEO Murray Auchincloss with Woodside Energy chief Meg O’Neil, who will take the role in April 2026. The move comes amid pressure from activist investor Elliott Investment Management, which holds a £3.8 bn stake and has called for a faster strategic overhaul. BP’s decision to increase its energy‑transition spend to 30% of total expenditure since 2020 has sparked debate among shareholders concerned about the company’s environmental commitments.

These developments underscore the interconnected nature of global energy markets, where shifts in commodity policies, corporate governance, and supply‑chain logistics can have far‑reaching implications for shipping and marine fuels.

Conclusion

China’s decision to issue general rare‑earth export licenses marks a tangible step toward normalizing trade flows after a period of heightened tension. The reforms are likely to benefit a range of high‑tech industries and may help to mitigate some of the supply‑chain disruptions that have plagued the sector. As the world watches how these changes unfold, market participants will be closely monitoring the pace and scale of license approvals and the broader impact on global rare‑earth availability.

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**Key Takeaways**

• China approves ~70% of rare‑earth license requests, up from ~50%.
• General licenses reduce paperwork and are valid for up to a year.
• EU actively seeks these permits to support repeat shipments.
• The policy shift is part of a broader effort to stabilize critical mineral supply chains.
• BP’s leadership change reflects wider industry dynamics around energy transition and shareholder pressure.