China’s rare earth curbs hit US aerospace, chips hard despite Trump’s trade truce

Suppliers to US aerospace and semiconductor ⁠firms face worsening rare earth shortages, with two turning away some clients, industry insiders said, weeks before US President Donald Trump is expected to meet his Chinese counterpart Xi Jinping for a summit in Beijing.

The shortages centre on rare earths such as yttrium and scandium, niche members of the family of 17 elements, which play tiny but vital roles in defence technology, aerospace and semiconductors and are almost entirely produced in China.

While Beijing has allowed many rare earth exports to resume since it imposed restrictions in April, ‌shipments of these materials still rarely make it to the US despite the October detente with Washington, Chinese customs data shows.

That easing of trade tensions, premised in part on China pausing its critical mineral export restrictions, will be on the table when Trump and Xi meet in Beijing in March.

A key pain point is yttrium, used in coatings that keep engines and turbines from melting at high temperatures. Without regular application of these coatings, engines cannot be used.

Since Reuters first reported about yttrium shortages in November, prices have jumped 60 per cent and are now about 69 times as high as a year ago. Some coatings manufacturers are also now starting to ration material, according to company executives and traders.