US urges China to lift rare earth export ban on Japan

The United States is pressing China to lift its suspension of rare earth exports to Japan, according to reports.

The Nikkei reported Wednesday, citing US-Japan diplomatic sources, that Washington raised concerns over China's rare earth embargo against Japan during economic and trade negotiations last month between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng.

The US side argued that if Chinese export restrictions disrupted production of Japanese goods relying on rare earths and other critical minerals, it could create problems for global supply chains, including those of the United States.

China's response to the US overture was not disclosed. A source told the Nikkei that the talks had "not yet reached the point of easing China's pressure on Japan" over rare earth export restrictions, adding that Japan would need to "continue working with the United States to keep pushing."

China has been at odds with Japan since Prime Minister Sanae Takaichi said last September that Japan could intervene in a Taiwan contingency. Beijing issued a travel advisory discouraging visits to Japan, and performances related to Japan were canceled inside China. China then in effect banned rare earth exports to Japan by announcing a crackdown on shipments of goods with both civilian and military applications.

In response, Japan put China's rare earth export restrictions on the agenda at the G7 finance ministers and central bank governors meeting held in Paris on May 18, where participants discussed international cooperation and support for lifting the embargo. Japanese media outlets said the issue could also come up at the G7 summit in Évian, France, on June 15. The Nikkei said it is also expected to be on the agenda when Chinese President Xi Jinping visits the United States for summit talks in September.

Japanese companies have been sounding the alarm as estimates suggest rare earth shipments from China to Japan have plunged 80 percent this year as a result of the embargo.

Japan's NHK reported that Keidanren (Japan Business Federation) Chairman Yoshinobu Tsutsui said at a recent news conference that he had "strong concerns about the drying up of new business discussions with China."

Keidanren had planned to send a delegation of 230 members, including Chairman Tsutsui, to China in January under the Japan-China Economic Association, but the visit was postponed following Prime Minister Takaichi's remarks on Taiwan and has still not been rescheduled. Tsutsui urged a diplomatic resolution, saying that while "Japan-China relations remain extremely serious, with no common ground or opening in sight, we must explore opportunities for dialogue on multiple fronts."