China holds meetings, defends export control as response to U.S. sanctions

China spent this week in Washington explaining itself. Top officials held private talks with key global partners during the International Monetary Fund’s annual meetings, trying to cool the growing backlash over Beijing’s rare‑earth export clampdown.

According to Bloomberg, Chinese representatives told attendees the new rules won’t interfere with everyday trade. Still, they would build a long-term structure for rare-earth oversight, and it was also a direct response to recent U.S. sanctions, especially those now targeting affiliates of already blacklisted companies.

The sudden restriction from China, which dominates the global rare‑earth supply, triggered alarm in Japan, Europe, and across allied governments. Concerns over stability in the supply chain grew louder.

These minerals are used in everything from crypto mining rigs and EV batteries to missile systems. The pressure gave the U.S. an opening to circle its allies, a move that worked against Beijing’s efforts to win diplomatic ground abroad.

China holds meetings, defends export control as response to U.S. sanctions

Inside the Washington sessions, Vice Finance Minister Liao Min and People’s Bank of China Governor Pan Gongsheng met one-on-one with officials from at least seven countries, including the U.S., U.K., Germany, and several international organizations.

Statements from the meetings gave no details, only referring to “economic and financial discussions.” But those in the room confirmed the Chinese officials reiterated that the rules do not amount to an outright ban. They insisted that shipments for civil use would still be approved if applicants followed the process.

Commerce Minister Wang Wentao blamed the current trade tensions squarely on American moves. He echoed previous remarks by China’s Ministry of Commerce, which said the export controls were triggered by the U.S.’s aggressive sanctions expansion and weren’t meant to fully shut down trade.

Despite rising concerns from the Group of Seven, member states failed to issue a coordinated response after their gathering in Washington. Japanese Finance Minister Katsunobu Kato voiced frustration at China’s decision but warned allies to be careful.

“If our actions were to trigger a cycle of retaliation, that could have adverse effects on the global economy and markets,” Kato said. Some G7 members are now holding off, waiting to see what comes out of a planned meeting between President Donald Trump and President Xi Jinping in South Korea next week.

U.S. and China prepare leaders’ meeting as rare-earth shipments plunge

With things heating up, the U.S. Treasury also got involved. Treasury Secretary Scott Bessent spoke with Vice Premier He Lifeng on Friday evening, and both agreed to meet again next week in Malaysia. That meeting is part of the prep ahead of the Trump–Xi summit, which Washington hopes will stop the trade spiral.

“I think things have de-escalated,” Scott said at a White House event. “I am confident that President Trump, because of his relationship with President Xi, will be able to get things back on a good course.”

This comes after Trump threatened 100% tariffs and even considered pulling out of the meeting altogether, a warning that now seems off the table as dialogue resumes. But the controls are still very much in place.

Under the new system, even non-Chinese companies must now get permits if their products contain any trace of the listed minerals. It’s a massive expansion of China’s regulatory reach, one that could affect supply chains far beyond Beijing’s borders.

Meanwhile, China’s exports of rare‑earth materials took a hit. New customs figures show shipments dropped to 6,538 tons in September, down from 7,338 tons in August. That August figure was the highest since at least 2012.

Before this drop, exports had been rising steadily, signaling strong global demand, especially for sectors tied to crypto, EVs, aerospace, and defense. Governments and markets are now eyeing the Trump–Xi meeting in South Korea. That meeting will decide whether the entire world is cooked or not.

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