China Lifts Rare Earth Export Ban After U.S. Trade Deal, Boosting Global Supply Chains

China has lifted its export restrictions on rare earth elements and critical minerals, unleashing a flood of materials vital for semiconductors, EV batteries, and defense tech. This dramatic reversal, set to last for a full year, comes after months of tension and follows a landmark U.S.-China trade deal that caught markets off guard. The move promises to stabilize global supply chains that were pushed to the brink since the sudden October 9 ban, preventing potential shutdowns in high-tech manufacturing worldwide.

The breakthrough deal stems from a high-stakes, closed-door meeting between Donald Trump and Xi Jinping in Busan, South Korea, on October 30. The U.S. committed to slashing tariffs on Chinese imports by 10%, freezing all retaliatory duties until 2026, and easing aggressive blacklisting threats against key Chinese firms. In swift response, China reopened exports of gallium, germanium, antimony, lithium battery materials, synthetic diamonds, boron nitrides, and dual-use graphite—strategic minerals it dominates with up to 94% of global gallium production and over 60% of lithium refining capacity.

Markets reacted instantly and decisively, with semiconductor ETFs and EV stocks surging in early trading as manufacturers anticipate lower input costs and reliable supply flows. Prices for lithium, gallium, and rare earths—once skyrocketing due to export curbs—are now expected to stabilize or even drop, directly boosting profit margins for tech giants and accelerating innovation in cutting-edge fields like quantum computing, hypersonic missiles, and next-generation electric vehicles.

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India stands to gain massively from this geopolitical shift, with its aggressive push into chipmaking and electric mobility via government schemes worth over Rs 94,000 crore in incentives. Homegrown heavyweights like Tata Electronics, Vedanta, Tata Motors, Mahindra & Mahindra, BEL, HAL, and Bharat Dynamics can now secure cheaper, more predictable inputs. Industry experts say if India locks in long-term mining partnerships and builds domestic rare earth processing plants, it could leapfrog into a global manufacturing superpower.

This mineral thaw could quietly redefine global economic and military power, easing critical shortages, fueling a new tech arms race, and reshaping alliances—while China, still holding the world’s largest reserves, retains ultimate leverage over the most strategic resources on Earth.

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