<div id="readability-page-1">BEIJING/WASHINGTON, May 13 (Reuters) - China and the U.S. are considering extending a truce on Chinese rare earth export curbs at a leaders' summit this week, but Chinese customs data shows Beijing is still throttling shipments of the materials vital for defence and manufacturing. The resulting shortages and higher prices around the world underscore how controls imposed in retaliation for President Donald Trump's Liberation Day tariffs have become one of the policy's major legacies, long after the scaling back of most of the duties. Beijing's controls remain tightest over several specialty rare earths, produced at scale only in China and used in aerospace, defence, semiconductors and powerful magnets found within electronics and manufactured goods, including electric cars. Exports of the heavy rare earths yttrium, dysprosium and terbium are still down some 50% since controls were imposed in April 2025 versus the 12 months prior, Chinese customs data shows. The amounts in question are often measured in the tens of tons, and their decline has been obscured by an almost complete rebound in total rare earth exports over the past year. &#34;Headline export volumes can be misleading,&#34; says Ilya Epikhin, senior principal at consultancy Arthur D. Little. &#34;China appears to be selectively licensing exports while preserving leverage over supply chains considered strategically sensitive, particularly where defense or advanced technology applications are involved.&#34; These shortages appear at odds with what the White House says China agreed at a summit in South Korea last October, to &#34;effectively eliminate China's current and proposed controls on rare earth elements.&#34; China rolled back a wider set of restrictions after the summit but left its April 2025 controls in place. Beijing has repeatedly defended them and says it approves eligible requests. Its Ministry of Commerce did not respond to questions from Reuters. The gap between those positions and a possible extension of the October deal will be on the agenda when the leaders meet again this week, alongside possible Chinese purchases of Boeing ( BA ) airplanes and U.S. agriculture and energy. A senior U.S. official told reporters on Sunday conversations with Beijing on rare earths continued, and that both sides wanted stability, although it wasn't clear if the agreement would be extended during or after Trump's visit. Separately, a second U.S. official speaking on condition of anonymity told Reuters that shortages continue to be a problem. The White House recently had to intervene with Beijing to secure approvals for a large U.S. firm with defence and civilian units that was losing hundreds of millions in revenue a month because it could not get an export license, according to a third U.S. official who also declined to be named because they were unauthorised to speak to the media. Reuters reported in February that some U.S. aerospace companies had temporarily paused production due to shortages of yttrium, used to protect turbine blades from heat. &#34;The President's team is engaging continuously with China to ensure the flow of rare earths while building out trusted and resilient supply chains,&#34; a White House official said in response to Reuters' questions on the issue. HURTING U.S. ALLIES While the controls were introduced in retaliation against Trump's tariffs, their impact is being felt just as much by U.S. allies as Washington. Prices outside China since April 2025 have soared between four- and five-fold for dysprosium and terbium and about 140-fold for yttrium and continue to climb, according to data from consultancy Argus. That reflects how major consumers of Chinese rare earths such as Japan and Germany are also being cut off to degrees that are, in some cases, more drastic than the U.S., Chinese customs data showed. Dysprosium is commonly added to magnets to increase strength and since April 2025, Japan, the largest rare earth magnet maker outside China, received just 4% of the dysprosium it imported over the 12 months prior. Germany has received none. Manufacturers are now paying between 1.5 and 3 times more for magnets than before the controls, according to Neha Mukherjee, rare earth research manager at Benchmark Mineral Intelligence. Germany and Japan along with the U.S. and other countries are investing in projects to diversify away from China, including a recent G7 initiative on alternative supply chains. However, full replacement of China is still years away, according to David Merriman, research director at consultancy Project Blue. &#34;The situation looks set to get worse before getting any better,&#34; said Merriman. (Reporting by Lewis Jackson, Laurie Chen, Michael Martina and Trevor Hunnicutt; additional reporting by Tom Daly, Pratima Desai and Eric Onstad in London. Editing by Tony Munroe, Veronica Brown and Sonali Paul)</div>

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China and the U.S. are considering extending a truce on rare earth export curbs during an upcoming leaders’ summit. Despite this, Chinese exports of heavy rare earths remain down by 50% since April 2025, impacting global supply and prices. The U.S. and its allies, including Japan and Germany, are facing significant shortages and soaring prices, with some materials increasing four- to five-fold. The situation is exacerbated by China's selective licensing of exports, which affects defense and advanced technology sectors. Discussions on this issue will be a key agenda item at the summit.

Trump, Xi to weigh rare earth truce extension, but China's curbs still bite