Latest news with #rareEarthMagnets
Yahoo
28-07-2025
- Business
- Yahoo
Rare Earth Magnets Market Report 2026-2036, with Detailed Analysis of 29 Leading Companies Across the Rare Earth Magnet Value Chain
In 2025, the rare earth magnet market faces unprecedented pressures due to geopolitical tensions, supply chain disruptions, and soaring demand from emerging technologies such as electric vehicles and robotics. China's export controls have particularly impacted industries like defense and Tesla's humanoid robots, causing significant ripple effects worldwide. The U.S.'s strategic interventions, including a $400 million investment in MP Materials and Apple's $500 million recycling partnership, highlight efforts to lessen dependency on Chinese exports. The demand for rare earth magnets, valued at $19 billion, continues to grow, underscoring the necessity for alternative technologies and robust domestic supply chains. The report examines the entire supply chain, from mining to recycling, and profiles key industry players. Dublin, July 28, 2025 (GLOBE NEWSWIRE) -- The "Global Rare Earth Magnets Market 2026-2036" report has been added to offering. The rare earth magnet market stands at a critical juncture in 2025, shaped by unprecedented geopolitical tensions, supply chain disruptions, and explosive demand growth from emerging technologies. The industry's strategic importance has become paramount as governments and corporations recognize these materials as essential infrastructure for the global energy transition and technological advancement. The most significant recent development has been China's implementation of export controls on rare earth magnets beginning in April 2025, which triggered immediate supply chain disruptions across multiple industries. China's rare earth magnet exports to the United States experienced dramatic volatility, with shipments initially halted before surging 660% in June 2025 following trade negotiations. This rebound, while substantial, still leaves overall 2025 exports trailing previous year levels, demonstrating the fragility of current supply arrangements. The export restrictions particularly impacted critical applications including defense systems, electric vehicles, and emerging technologies like Tesla's Optimus humanoid robots. Ford halted production at its Chicago plant due to magnet shortages, while companies across industries depleted stockpiles while scrambling for alternative sources. Despite a temporary trade framework announced in June 2025, implementation remains problematic with companies facing ongoing uncertainty about future supply availability. The crisis has accelerated fundamental restructuring of global rare earth magnet supply chains. The U.S. Department of Defense's $400 million investment in MP Materials represents the largest government intervention in the sector, aimed at creating domestic magnet production capabilities. MP Materials has strategically halted all rare earth exports to China as of April 2025, redirecting focus toward domestic processing and magnet manufacturing at its Mountain Pass facility. Apple's $500 million partnership with MP Materials for recycling facility development exemplifies industry efforts to build resilient domestic supply chains. These initiatives reflect growing recognition that supply chain diversification requires comprehensive investment across the entire value chain, from mining through final magnet production. However, analysts warn that developing complete alternatives to Chinese capabilities will require years rather than months, given the complex separation and processing technologies involved. Market fundamentals remain exceptionally strong despite supply disruptions. Global rare earth magnet demand approaches 385,000 tonnes annually in 2025, valued at approximately $19 billion, with compound annual growth of 7.8% driven primarily by automotive electrification and renewable energy deployment. Emerging applications promise even more dramatic growth. Robotics, currently a small demand category, is forecast to become the single largest driver of neodymium-iron-boron (NdFeB) magnet consumption by 2040, driven by professional service robots in manufacturing, hospitality, and transportation. The humanoid robotics sector alone could require massive magnet quantities as production scales toward potential deployment of billions of units. Rising costs and supply uncertainty are driving intensive research into alternative magnet technologies. Cerium-based formulations are gaining attention as substitutes for dysprosium-enhanced magnets, with cerium offering advantages as a light rare earth element avoiding current export restrictions. Companies like Volkswagen's Scout Motors are exploring magnet-free motor designs, while automakers broadly investigate reduced-magnet architectures. However, these alternatives often involve performance trade-offs that limit applicability in high-performance applications. The concept of "demand destruction" through technological substitution represents a long-term market risk, but near-term demand growth from electrification continues to outpace substitution efforts. The rare earth magnet market's evolution represents a fundamental shift from commodity trading toward strategic resource management, with profound implications for global technology deployment, national security, and the pace of energy transition. Success in navigating these challenges will determine which nations and companies maintain technological leadership in the emerging clean energy economy. The Global Rare Earth Magnets Market 2026-2036 report provides the most comprehensive analysis of the rapidly evolving rare earth permanent magnet industry, delivering critical insights into market dynamics, supply chain vulnerabilities, technological innovations, and strategic opportunities across key application sectors. This authoritative 270-page plus report combines deep technical expertise with extensive market research to deliver actionable intelligence for stakeholders navigating the complex rare earth magnet ecosystem. As global demand for high-performance magnetic materials accelerates driven by electrification megatrends, renewable energy deployment, and emerging technologies including humanoid robotics, the rare earth magnet market faces unprecedented supply chain challenges and strategic realignment. With China's dominant position in production and processing creating geopolitical risks, alternative supply chain development has become a critical priority for governments and corporations worldwide. This report examines the complete rare earth magnet value chain from mining and separation through metallization, manufacturing, and recycling, providing detailed analysis of production capacity forecasts, demand projections by application segment, technological innovation pathways, and strategic recommendations for market participants. The analysis covers neodymium-iron-boron (NdFeB) and samarium-cobalt (SmCo) permanent magnet technologies across automotive, wind energy, consumer electronics, data centers, robotics, medical imaging, aerospace, marine, and industrial automation applications. Report contents include: Critical materials classification and rare earth magnet technology fundamentals Global market sizing, demand projections, and geographic distribution analysis Supply chain architecture assessment and strategic implications Regulatory environment evolution and policy framework impact Supply Chain and Value Chain Analysis Complete value chain structure from mining through magnet manufacturing Geographic production stage distribution and regional cluster development Market entry barriers, implementation challenges, and competitive dynamics 2025 export restriction impact assessment on dysprosium, terbium, and NdFeB alloys Rare Earth Mining and Production Global mining landscape with detailed regional development analysis North American, Australian, European, South American, and African project pipelines Hard rock versus ionic clay deposit comparison and processing technologies Mining economics, financial modelling, and resource discovery lifecycle analysis Processing and Separation Technologies Comprehensive processing technology comparison including hydrometallurgical and bioleaching methods Solvent extraction, chromatography, and multi-line separation system analysis Global processing capacity forecasts and geographic distribution projections Technology innovation roadmap and development priorities Magnet Manufacturing and Technology Metallization process fundamentals and global capacity control analysis NdFeB and SmCo magnet technology comparison and performance characteristics Sintered and bonded magnet manufacturing processes and innovation developments Grade classification, performance specifications, and cost structure analysis Application Market Analysis Electric vehicle and e-mobility market demand forecasts with motor technology assessment Wind energy sector analysis including turbine technology and magnet requirements Consumer electronics, data centers, and hard disk drive market dynamics Robotics and humanoid robot technology platform analysis Medical imaging, aerospace, marine, and industrial automation applications Recycling Technologies and Circular Economy Short-loop and long-loop recycling technology comparison and performance analysis Feedstock sources, pre-processing challenges, and automation integration Market barriers assessment and industry outlook through 2036 Value chain evolution and circular supply chain development Market Forecasts and Strategic Analysis Production capacity forecasts by geographic region (2026-2036) Demand projections by application segments and materials Supply-demand balance analysis and shortage risk assessment Revenue forecasts, investment opportunities, and risk assessment framework Technology innovation roadmap and competitive dynamics evolution Company Profiles and Competitive Intelligence Detailed analysis of 29 leading companies across the rare earth magnet value chain Strategic positioning, technology focus, and market development initiatives Investment activities, partnership strategies, and capacity expansion plans The report provides comprehensive profiles of 29 leading companies across the rare earth magnet value chain including: Arafura Resources Limited Australian Strategic Materials Ltd (ASM) Carester (Caremag) Cyclic Materials Energy Fuels Inc. Hastings Technology Metals Limited HyProMag Ionic Rare Earths Ionic Technologies JL Mag Lynas Rare Earths Limited MagREEsource Materials Nexus Metalysis MP Materials Corporation Neo Performance Materials Niron Magnetics and more. These profiles examine strategic positioning, technology capabilities, production capacity, market focus, and development initiatives across mining, processing, manufacturing, and recycling operations. For more information about this report visit About is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends. CONTACT: CONTACT: Laura Wood,Senior Press Manager press@ For E.S.T Office Hours Call 1-917-300-0470 For U.S./ CAN Toll Free Call 1-800-526-8630 For GMT Office Hours Call +353-1-416-8900Connectez-vous pour accéder à votre portefeuille
Associated Press
16-06-2025
- Business
- Associated Press
Hypromag Achieves Further Technical Milestones as Piloting Ramps Up in Advance of Commercial Rare Earth Magnet Production in The Uk, Germany and USA
LONDON, UK AND VANCOUVER, BC / ACCESS Newswire / June 16, 2025 / Mkango Resources Ltd. (AIM:MKA)(TSX-V:MKA) ('Mkango') and CoTec Holdings Corp. (TSXV:CTH)(OTCQB:CTHCF) ('CoTec') are pleased to provide a technical update for HyProMag Limited ('HyProMag') and its ongoing advanced pilot programme for the scale-up and roll out of Hydrogen Processing of Magnet Scrap ('HPMS') technology to produce domestically sourced and short-loop recycled rare earth magnets with a minimal carbon footprint in the UK (2025), Germany (2025) and United States (2027). The ongoing advanced pilot programme at the University of Birmingham is proceeding in parallel with development of the commercial scale plant at Tyseley Energy Park in Birmingham, UK. HPMS technology was developed by the Magnetic Materials Group at the University of Birmingham ('UoB'), underpinned by approximately US$100 million of research and development funding. HPMS has major competitive advantages over other rare earth magnet recycling technologies, which are largely focused on chemical processes but do not solve the challenges of extracting magnets from end-of-life scrap streams and only produce rare earth oxides or mixed rare earth carbonates, which require further processing. HyProMag provides the solution, producing a value-added, magnet product for direct sale to domestic customers across multiple jurisdictions. Over the course of the previous 12 months, HyProMag has made significant technical progress to support its efforts in optimising design criteria, processing different NdFeB scrap feed materials and producing recycled, low carbon, commercial, magnets of different technical grades. To date, the University of Birmingham Pilot plant has produced over 3,500 magnets of commercial grade from various waste streams. Sample magnets have been provided to commercial partners for extensive testing and product verification and will support continued off taker due diligence over the coming 12 months for the UK, Germany and U.S. businesses. Recent progress and technical milestones for HyProMag include the following: Through the abovementioned workstreams, together with further optimisation and development of blending and grain boundary technologies, HyProMag expects to significantly expand the range of commercial grades produced as illustrated below: Will Dawes, Mkango CEO commented: 'HyProMag is going from strength to strength with the support of its excellent and growing team, as well as from the University of Birmingham and its other partners. The company is well placed to capitalise on the increasing demand for more robust supply chains and sustainably sourced magnetic materials - technologies being commercialised by HyProMag will be transformational for the sector, and we look forward to first sales in UK and Germany in the coming months, as well as completion of detailed engineering in the USA in advance of large-scale project development.' Julian Treger, CoTec CEO commented: " We are very pleased with the continued progress of HyProMag in advance of the commissioning of the UK and German plants. The learnings from these plants and the University of Birmingham's pilot plant programme represent a significant opportunity for HyProMag USA to optimise and refine the detailed design phase. Furthermore, the production of a wide range of magnet grades for U.S. customers from multiple scrap feedstocks will support our financing and off take activities.' Nick Mann, HyProMag Limited MD commented: 'The improvements on magnetic properties made are down to the increased understanding gained by the metallurgical team on how to process, blend and sinter differing input feed stocks to achieve a consistent grade of magnet. As we begin production at Tyseley we are testing, collaborating and supplying our commercial partners with our magnets against specifications and are demonstrating good alignment with their products.' Sean Worrall, GKN Automotive Chief Engineer Product Sustainability commented: 'As the key physical testing and simulation partner, we are pleased to confirm that the recycled magnets replicated expected performance exceptionally closely during testing. This means HyProMag's short-cycled magnets can be reliably used in motor design simulation to deliver real world performance. The HPMS process enables a supply chain of sustainable, competitive, rare-earth magnets, decoupled from the problems of the virgin material supply chain' 2025 University of Birmingham (UoB) Accelerated Pilot Programme In parallel with commissioning of the commercial plants in UK and Germany, and to support ongoing HyProMag USA LLC ('HyProMag USA') detailed design [ii] , HyProMag has further invested in piloting utilising the UoB infrastructure, onboarded new production engineers and tripled the throughput capacity of the UoB pilot vessel and associated processes. During a six-month period, multiple sources of scrap feeds will be processed with a target of two tonnes of HPMS power produced and converted into commercial grade magnets. HyProMag will provide these samples to potential customers, as well as targeting further improvements in the engineering design criteria, recoveries and magnet making capability to support commercial developments in the UK, Germany and U.S. The main objectives of the 2025 UoB Accelerated Pilot Programme are to: The Accelerated Piloting Programme targets over 50 additional HPMS runs over a six-month period covering principal scrap feeds containing: separated magnet scrap, VCMs from different sources, pre-processed HDD feed, surface mounted and embedded rotors from electric motors, MRI, wind turbine feed, speaker assemblies and other forms of NdFeB scrap material provided by strategic partners. About Mkango Resources Ltd. Mkango is listed on the AIM and the TSX-V. Mkango's corporate strategy is to become a market leader in the production of recycled rare earth magnets, alloys and oxides, through its interest in Maginito Limited ('Maginito'), which is owned 79.4 per cent by Mkango and 20.6 per cent by CoTec, and to develop new sustainable sources of neodymium, praseodymium, dysprosium and terbium to supply accelerating demand from electric vehicles, wind turbines and other clean energy technologies. Maginito holds a 100 per cent interest in HyProMag and a 90 per cent direct and indirect interest (assuming conversion of Maginito's convertible loan) in HyProMag GmbH, focused on short loop rare earth magnet recycling in the UK and Germany, respectively, and a 100 per cent interest in Mkango Rare Earths UK Ltd ('Mkango UK'), focused on long loop rare earth magnet recycling in the UK via a chemical route. Maginito and CoTec are also rolling out HPMS recycling technology into the United States via the 50/50 owned HyProMag USA LLC joint venture company. Mkango also owns the advanced stage Songwe Hill rare earths project in Malawi ('Songwe') and the Pulawy rare earths separation project in Poland ('Pulawy'). Both the Songwe and Pulawy projects have been selected as Strategic Projects under the European Union Critical Raw Materials Act. Mkango has signed a letter of Intent with Crown PropTech Acquisitions to list the Songwe Hill and Pulawy rare earths projects on NASDAQ via a SPAC Merger. For more information, please visit About CoTec Holdings Corp. CoTec is a publicly traded investment issuer listed on the Toronto Venture Stock Exchange ('TSX- V') and the OTCQB and trades under the symbols CTH and CTHCF respectively. CoTec Holdings Corp. is a forward-thinking resource extraction company committed to revolutionizing the global metals and minerals industry through innovative, environmentally sustainable technologies and strategic asset acquisitions. With a mission to drive the sector toward a low-carbon future, CoTec employs a dual approach: investing in disruptive mineral extraction technologies that enhance efficiency and sustainability while applying these technologies to undervalued mining assets to unlock their full potential. By focusing on recycling, waste mining, and scalable solutions, the Company accelerates the production of critical minerals, shortens development timelines, and reduces environmental impact. CoTec's strategic model delivers low capital requirements, rapid revenue generation, and high barriers to entry, positioning it as a leading mid-tier disruptor in the commodities sector. For more information, please visit About HyProMag USA LLC. HyProMag USA is owned 50:50 by CoTec and HyProMag Limited. HyProMag Limited is 100 per cent owned by Maginito, which is owned on a 79.4/20.6 per cent basis by Mkango and CoTec. For more information, please visit Market Abuse Regulation (MAR) Disclosure The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain. Cautionary Note Regarding Forward-Looking Statements This news release contains forward-looking statements (within the meaning of that term under applicable securities laws) with respect to Mkango and CoTec. Generally, forward looking statements can be identified by the use of words such as 'plans', 'expects' or 'is expected to', 'scheduled', 'estimates' 'intends', 'anticipates', 'believes', or variations of such words and phrases, or statements that certain actions, events or results 'can', 'may', 'could', 'would', 'should', 'might' or 'will', occur or be achieved, or the negative connotations thereof. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. Such factors and risks include, without limiting the foregoing, the delivery and effectiveness of the HDD magnet separation system built by Inserma, the results of the Accelerated Pilot Programme at UoB, the availability of (or delays in obtaining) financing to develop Songwe Hill, the Recycling Plants being developed by Maginito in the UK, Germany and the US (the 'Maginito Recycling Plants'), governmental action and other market effects on global demand and pricing for the metals and associated downstream products for which Mkango is exploring, researching and developing, geological, technical and regulatory matters relating to the development of Songwe Hill, the ability to scale the HPMS and chemical recycling technologies to commercial scale, competitors having greater financial capability and effective competing technologies in the recycling and separation business of Maginito and Mkango, availability of scrap supplies for Maginito's recycling activities, government regulation (including the impact of environmental and other regulations) on and the economics in relation to recycling and the development of the Maginito Recycling Plants, and Pulawy and future investments in the United States pursuant to the proposed cooperation agreement between Maginito and CoTec, cost overruns, complexities in building and operating the plants, and the positive results of feasibility studies on the various proposed aspects of Mkango's, Maginito's and CoTec's activities. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, the Company and CoTec disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise, except as required by applicable law. Additionally, the Company and CoTec undertake no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above. For further information on Mkango, please contact: Mkango Resources Limited William Dawes Alexander Lemon Chief Executive Officer President [email protected]@ Canada: +1 403 444 5979 @MkangoResources SP Angel Corporate Finance LLP Nominated Adviser and Joint Broker Jeff Keating, Jen Clarke, Devik Mehta UK: +44 20 3470 0470 Alternative Resource Capital Joint Broker Alex Wood, Keith Dowsing UK: +44 20 7186 9004/5 For further information on CoTec, please contract: CoTec Holdings Corp. Braam Jonker Chief Financial Officer [email protected] Canada: +1 604 992-5600 The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This press release does not constitute an offer to sell or a solicitation of an offer to buy any equity or other securities of the Company in the United States. The securities of the Company will not be registered under the United States Securities Act of 1933, as amended (the 'U.S. Securities Act') and may not be offered or sold within the United States to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act. [i] [ii] SOURCE: CoTec Holdings Corp. press release
Daily Mail
14-06-2025
- Automotive
- Daily Mail
Ford CEO says rare earths shortage forced it to shut factory
China 's trade leverage temporarily shuttered one of Detroit's biggest brands. Ford's CEO, Jim Farley, said his company doesn't have enough rare-earth magnets, forcing the automaker to halt some production lines. 'It's day to day,' the top boss said in a Friday interview with Bloomberg News. 'We have had to shut down factories. It's hand-to-mouth right now.' Ford's production struggles are part of the ongoing tit-for-tat trade escalation between Washington and Beijing . But the company is expecting relief in the coming weeks. In April, Chinese officials stopped the flow of magnets into the US — a critical component found in nearly every modern car's brake pads, seats, windshield wipers, and batteries. The pause came in response to President Donald Trump 's then-145 percent tariffs on all Chinese imports. The throttled magnet trade threatened to strangle production plants and empty car dealership lots, sending automakers and industry groups into a tizzy. In May, the Alliance for Automotive Innovation — which represents major US automakers — sent a letter to President Trump warning that China's response could paralyze car production. Later that month, workers at Ford's Chicago plant, where the company builds the popular Explorer SUV, were told to go home due to the magnet shortage. But as Ford continues to scramble for parts, the company is now expecting a reopening of the supply spigot. American and Chinese trade negotiators have announced a tentative agreement that lowers tariff rates and resumes magnet exports. The deal includes temporary export licenses for rare-earth suppliers . Those licenses will allow magnet shipments to resume to the top three US automakers — including Ford — as soon as this month. China's President Xi Jinping has not officially signed the deal, but President Trump posted on Truth Social that the agreement was 'done.' Industry analysts confirmed to that rare-earth magnets will likely be exempt from American tariffs under the new deal. Still, as the pipeline starts back up, Farley's announcement underscores China's current leverage over American manufacturing. The US once refined its own rare-earth magnets for vehicle assembly, with facilities operating across dozens of Midwestern states. But 20 years ago, the last domestic refinement plant — located in Indiana — shut down. China, which now controls more than 90 percent of global rare-earth processing capacity, filled the gap. American automakers are now looking elsewhere for supply, including Australia, Canada, and Saudi Arabia. 'Should the US-China trade deal be upheld by both sides, US automakers should be able to secure enough rare earths to continue their production as scheduled,' Seth Goldstein, a vehicle analyst at Morningstar, told 'I would guess all US automakers are looking to secure alternate rare earths supply outside of China as a way to protect themselves from the potential that China may halt exports again in the future.' A representative for Ford didn't immediately respond to request for comment.
Yahoo
14-06-2025
- Automotive
- Yahoo
Ford still struggling with rare earth supplies
-- Ford Motor Co . (NYSE:F) is still facing ongoing challenges with the supply of rare earth magnets from China, crucial for production of its cars. Ford CEO Jim Farley described the situation as "day to day" and "hand-to-mouth" in a Friday interview with Bloomberg TV. Last month, Ford idled its Chicago factory, which produces the Explorer sport utility vehicle, for a week because of the rare earth materials shortage. Farley expressed optimism about recent U.S.-China trade talks but noted that Ford has not yet seen improvements in magnet supply flow. The company has submitted applications to China's ministry of commerce (Mofcom), which are being approved one at a time. U.S. President Donald Trump stated that recent negotiations with China resulted in an agreement for Beijing to quickly approve export licenses for rare earths. Related articles Ford still struggling with rare earth supplies Wolfe downgrades GE Vernova on valuation concerns after rally Visa, Mastercard shares slide as WSJ says Walmart, Amazon exploring stablecoins
Japan Times
07-06-2025
- Business
- Japan Times
Xi bets Trump detente leads to future wins on chips and tariffs
In the early hours of Wednesday, Donald Trump declared that Xi Jinping was "VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!' Some 36 hours later, the U.S. leader said he got what he wanted: A commitment to restore the flow of rare earth magnets. It's less clear what Xi got in return, apart from putting a lid on further punitive U.S. measures. One of the few clear takeaways appeared to be an assurance for the U.S. to welcome Chinese students, a major issue in China but also not one that would explain why Xi got on the phone after making Trump wait for months. By taking the call now, Xi appears to be betting that a reset in ties will lead to tangible wins in the weeks and months ahead, including tariff reductions, an easing of export controls and a generally more civil tone. The biggest sign of that was another round of talks — planned for Monday in London — that will now include U.S. Commerce Secretary Howard Lutnick, who's in charge of curbs on the sale of advanced technology to China. Whether Xi will get any of that, however, now hinges on a famously erratic Trump administration in which views toward China differ drastically. "This call provides tactical de-escalation for U.S.-China relations,' said Sun Chenghao, a fellow at the Center for International Security and Strategy at Tsinghua University in Beijing. "However, China's core demands — equal sanction relief, reciprocal enforcement mechanisms, and an end to tech containment — remain critical for sustainable agreements,' he added. "Without substantive U.S. adjustments in follow-up talks and policies, the consensus may not translate into long-term stability.' Investors were skeptical that relations between the world's biggest economies were finally on track, with China's CSI 300 Index little changed on Friday. While the two leaders spoke just days before Trump's inauguration, Xi had kept his U.S. counterpart waiting for a phone call ever since as tensions rapidly escalated, with tariffs climbing well beyond 100% before the two sides agreed to lower them in Geneva last month. In recent days, Trump had looked like the more desperate of the two, seen by his repeated requests for a call capped off by his social media post at 2:17 a.m. on Wednesday. The call next day finally ended the longest post-inauguration silence between American and Chinese leaders in more than 20 years. "We're in very good shape with China and the trade deal,' Trump told reporters on Thursday after the 90-minute conversation. "I would say we have a deal, and we're going to just make sure that everybody understands what the deal is,' he added. The big immediate problem for the U.S. was a lack of rare earth magnets essential for American electric vehicles and defense systems. After the Geneva meeting, the U.S. side believed it had secured the flow of these materials, only to be disappointed when China kept its export licensing system in place, saying that exporters to the U.S. still needed to apply just like everyone else. China, in turn, felt betrayed by a fresh wave of U.S. restrictions on AI chips from Huawei Technologies, software for designing chips, plane engines and visas for upwards of 280,000 Chinese students. "Both sides felt that the agreement in Geneva was being violated,' said Gerard DiPippo, associate director at the RAND China Research Center. From the White House's perspective, he said, "China committed to send the magnets.' Although Xi flexed his muscles with the rare earths restrictions, he also has reasons to come to the table. China's economy is expected to slow sharply in the second quarter and come under pressure into the second half of the year, according to Morgan Stanley economists led by Robin Xing. "Now the China pendulum is swinging back from 'political principle' of standing firm against the U.S. to 'pragmatism' in support of a still fragile economy,' said Han Lin, China country director at The Asia Group. "In other words, Beijing wants to de-escalate, and as long as there is a face-saving path for Xi to do so, now is better than never.' Xi can point to several things that indicate more is coming. The addition of Lutnick in upcoming trade talks, led in Geneva by Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, signals Trump may be willing to consider reversing some of the technology curbs that threaten to hobble China's long-term growth ambitions. Xi's statement after the call also made clear he expects the U.S. to "remove the negative measures taken against China,' which could include warnings against the use of Huawei's Ascend chips and restriction on the sale of chip design software to China. The two leaders also exchanged invitations to visit each other's country, events that will build momentum toward stabilizing the relationship with agreements on thorny issues spanning trade, export controls and people-to-people exchanges. Trump said their wives would also come along, adding to the positive optics. It's significant that Trump agreed to visit China first, according to Bert Hofman, professor at the East Asian Institute at the National University Singapore and former World Bank country director for China. "Xi probably realized that a call would be in the Chinese interest given the eagerness of Mr. Trump to have one,' he said. "This will accelerate talks and hopefully extend the truce beyond August,' he added, as the tariff reductions agreed in Geneva will expire in early September. But some analysts advised against being overly optimistic, pointing out the lack of details on key trade matters. "There doesn't seem to be a deeper agreement that would prevent either side from taking additional negative actions, even as talks proceed,' said Kurt Tong, a former U.S. consul general in Hong Kong and a partner at The Asia Group. That fragility is compounded by Trump's transactional approach to foreign policy and ties with China in particular. In January 2020, when Trump signed a Phase-One trade deal with Beijing, he said the relationship between the countries was "the best it's ever been' before it quickly unraveled following the spread of COVID-19 around the globe. "It would be unwise to bet that Trump has a vision for further negotiations that he won't abandon suddenly later on,' said Graham Webster, who leads the DigiChina project at Stanford University. Another area where Xi could see an early win is on the issue of fentanyl. Any deal to cooperate in blocking the flow of the drug to the U.S. could immediately bring down American tariffs on Chinese imports by 20 percentage points. While the call helped to stem the negative trajectory of the relationship, the next two weeks will be crucial to confirm whether the truce will last, according to Wu Xinbo, a professor at Fudan University in Shanghai. He said China expects to see more progress on tariffs and U.S. tech curbs. "The call in itself is not a reward,' Wu said. "What's important is what will come out of the call.'
