Before the United States and Israel launched their attacks on Iran in late February about 3,000 vessels typically passed through the Strait of Hormuz each month, according to Lloyd’s List Intelligence. Oil tankers passing through accounted for an estimated 15 million barrels per day of crude and other oil product exports, data from the analytics firm Kpler shows, amounting to about one-fifth of the world’s oil trade.

But since the war began, traffic has been reduced to a trickle, with just 154 vessels recorded crossing in the entire month of March, according to Kpler data.

“The disruption is both rapid and unprecedented,” said Dimitris Ampatzidis, a maritime risk and compliance manager at Kpler.

Overall, traffic through Hormuz in the last two months has run at about 5% of the pre-war average, leading to shortages of refined products, especially in Asia.

Despite the dramatic disruption, a small number of ships are still coming in and out of the Persian Gulf via the strait. But experts say more vessels are leaving than entering, indicating that shipping operators are mitigating risks by avoiding the area entirely and reallocating flows.

“There are still over 800 vessels in the gulf, but ‘stranded’ isn’t the right term for all of them,” Ampatzidis told CNN in an email. “Many regional vessels, particularly Iranian and gulf operators, are continuing to operate normally within local routes.”

The strait is about 24 miles across at its narrowest point, which creates a chokepoint that Iran has been able to exploit as it exerts increased control over the world’s shipping and threaten vessels without needing to patrol a large area.

Following a ceasefire agreed on April 8, Iranian Foreign Minister Abbas Araghchi initially said that safe passage through the Strait of Hormuz would be possible via coordination with Iranian authorities. But the next day, Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed that traffic through the strait had been halted again, following what it said was an Israeli ceasefire violation in Lebanon.

The IRGC has since published a map showing what it called “alternative routes for transit” through the Strait of Hormuz that channel traffic through Iran’s territorial waters and past Larak Island, enabling checks by the Iranian navy and port authorities. The Revolutionary Guard also marked a so-called “danger zone” in the part of the strait that was previously the main International Maritime Organization (IMO) shipping corridor.

“The official IMO lane has been almost entirely abandoned. Instead, most vessels are now using a route along the Iranian coastline,” Ampatzidis said. “At the same time, a significant share of traffic remains ‘dark,’ meaning vessels are operating outside any verifiable corridor.”

Meanwhile, Iranian state media has reported on the country’s plans to continue charging transit fees to some ships seeking to pass, making it lucrative for Iran to try to retain control of the waterway.

As a response to Iran’s actions, the US on April 13 announced a blockade on ships entering or exiting Iranian ports and coastal areas. US forces have directed at least 38 vessels to turn around or return to an Iranian port since that blockade began, according to US Central Command.

Still, the latest shipping data shows that most vessels that have transited the Strait of Hormuz in recent days have taken the route designated by Iranian authorities, and about half of them loaded their cargoes at Iranian ports in defiance of the US blockade.

Iran’s ports are typically far from the busiest in the Persian Gulf, and the ports of Saudi Arabia and the United Arab Emirates usually have much higher traffic. But those countries and other gulf allies have been forced to cut production amid the shipping disruptions and threats from Iran.

Importing countries, particularly in Asia, are also suffering as they face fuel shortages.

“Japan and South Korea were big importers of Saudi and Middle Eastern crudes. And you know, looking at the rest of Asia — taking out China — we can see the big impact and the loss in terms of imports,” said Ioannis Papadimitriou, lead freight analyst at the data firm Vortexa.

Papadimitriou noted that the whole shipping industry is trying to drum up exports from alternative regions to keep oil moving and, crucially, to stay employed.

“If the situation is prolonged, we’re going to see loss of barrels that cannot be replaced from anywhere,” the Vortexa analyst added. “This is where we could see the real loss of cargoes — really hitting the shipping industry and dropping the (freight) rates.”

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The MIAX-AIM service primarily connects the Middle East, India, and West Africa, and is currently operated by approximately eleven ultra-large container vessels of around 24,300 TEU each. With the addition of the new port call, the MIAX-AIM port rotation will be as follows:

Jebel Ali – Mundra – Hazira – Nhava Sheva – Colombo – Durban – Tema – Lagos – Cape Town – Durban – Jebel Ali.

Hapag-Lloyd and ONE stated that the inclusion of Cape Town as an eastbound port of call will further enhance trade links between India, South Africa, and West Africa. This adjustment not only improves the flexibility of the MIAX-AIM corridor but also provides shippers and operators in the region with more choices and greater service convenience.

Analysts noted that this move reflects carriers’ proactive network optimization strategies amid ongoing adjustments to the global supply chain. The additional port call is expected to enhance coverage of key African markets and strengthen overall connectivity with other major trade regions.

Cape Town is one of South Africa’s most important maritime hubs. With its strategic geographic location at the southern tip of Africa, it serves as a critical gateway connecting major global trade routes. The newly added call is set to reinforce the port’s role and importance within the global shipping network.

As the MIAX-AIM service continues to be optimized, carriers and cargo owners can look forward to stronger interregional logistics connectivity and more efficient transport services, providing more stable and flexible support for trade flows among Asia, Africa, and Europe.

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The US Federal Aviation Administration warned major airlines on Friday of a “potentially hazardous situation” when flying over Venezuela and urged them to exercise caution.

The FAA notice cited the “worsening security situation and heightened military activity in or around Venezuela” and said threats could pose risks for aircraft at all altitudes.

There has been a massive American military buildup in the region in recent months, including the US Navy’s largest aircraft carrier, at least eight other warships, and F-35 aircraft.

The administration of US President Donald Trump has bombed boats allegedly carrying drugs that have departed from the shoreline of Venezuela and other Latin American countries.

Direct flights by US passenger or cargo carriers to Venezuela have been suspended since 2019, but some US airlines fly over the country for some South American flights.

Related article

Days ahead of terrorism designation for Maduro, US military performs large ‘attack demo’ near Venezuela

American Airlines said on Friday it had stopped overflying Venezuela in October. Delta Air Lines said it had stopped flying over Venezuela “a while ago.” United Airlines did not immediately comment.

The order requires US airlines to provide the FAA with at least 72 hours advance notice of planned flights but stopped short of prohibiting flights over the country.

The FAA said since September there has been an increase in Global Navigation Satellite System interference in Venezuela, which in some cases caused lingering effects throughout a flight, as well as “activity associated with increasing Venezuela military readiness.”

“Venezuela has conducted multiple military exercises and directed the mass mobilization of thousands of military and reserve forces,” the FAA said, adding that at no point had Venezuela expressed an intent to target civil aviation.

The agency said the Venezuelan military possessed advanced fighter aircraft and multiple weapons systems capable of reaching or exceeding civil aircraft operating altitudes, and there was potential low-altitude risk from air defense systems and anti-aircraft artillery.

The FAA said it will continue to monitor the risk environment for US civil aviation operating in the region.

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Flames rise from the Chevron refinery in El Segundo, California, on October 2, 2025.

Ethan Swope/AP

A large fire broke out Thursday night at a Chevron refinery, in El Segundo, the largest oil-producing facility on the West Coast, officials said.

The fire turned the dark night sky orange in the area surrounding the refinery, with towering flames and billowing plumes of smoke visible from afar, images posted on social media showed and witnesses recalled.

The fire, which is burning about 20 miles south of downtown Los Angeles, has since been contained and no evacuation orders for area residents are in place, the City of El Segundo, said in an online statement. Additionally, there were no injuries or immediate hazards to surrounding areas, El Segundo Fire Department Division Chief Casey Snow told CNN.

“I’ve never seen anything like it in my entire life … and it was horrifying,” Howard Thorne, an El Segundo resident told CNN affiliate KABC.

An aerial view of Chevron crews attempting to extinguish a large fire and explosion that occurred at Chevron Refinery in El Segundo Friday, Oct. 3.

Allen J. Schaben/Los Angeles Times via Getty Images

Fire crews arrived at 9:30 p.m. and were able to contain the flames to one section of the refinery. Hours later, at least one tank at the refinery was still burning, Snow said.

Keith Moore, who lives just south of the fire in Manhattan Beach, said he was at home with his family watching TV at the time.

“It was super scary,” Moore told KABC. “All of a sudden it kind of sounded like … plane engines, like almost a plane about to crash, and then a big whoosh and the curtains all flipped up because the windows were slightly open.”

“(It) almost felt like an earthquake because the house shook,” Moore said. “So we didn’t know what was going on.”

The fire is not in a location that poses an immediate risk to air quality for nearby residents, but the full impact of the incident remains unclear, he added.

The fire originated in the southeast corner of the refinery, the City of El Segundo said.

The Chevron refinery is the largest oil-producing facility on the West Coast, according to officials.

Ethan Swope/AP

A Chevron spokesperson told CNN the refinery’s fire department and local authorities responded to an “isolated fire” inside the facility, and all personnel are safe and accounted for. A monitoring system at the refinery indicates the fire did not go past the facility’s fence line, the spokesperson said.

Moore said the sky-high flames were about 400 yards from his house, so he and his family packed up their dogs and headed south “just to get out of harm’s way.”

“The whole sky was lit up,” Moore said. “It was like a really, really – brighter than the moon on a really bright day.”

While the fire raged, officials urged residents in the area to stay indoors.

A shelter-in-place order was issued for parts of Manhattan Beach, located about two miles southwest of El Segundo, but was lifted shortly after 1 a.m., according to an emergency notification from the city.

Pacific Coast Highway, which previously saw forced closures earlier this year due to the Palisades Fire, reopened Friday morning after the Chevron fire temporarily closed parts of the 11- mile roadway, according to the City of El Segundo

At the time of the fire, onshore winds from the west-southwest at nearby Los Angeles International Airport were blowing 10 to 15 mph, carrying smoke east. Winds have decreased to 5 mph or less, but are expected to increase again throughout the day, reaching 15 to 20 mph out of the west-southwest, with gusts up to 25 mph possible.

Most surrounding air quality monitors still reported “Good” conditions, though particle levels briefly spiked at a few stations just east of El Segundo. As of Friday morning, the air quality in El Segundo was still listed in “Good” condition.

Los Angeles Mayor Karen Bass and California Gov. Gavin Newsom have both been briefed on the fire.

“LAFD stands at the ready to assist with any mutual aid request,” Bass wrote on X. “There is no known impact to LAX at this time.”

Meanwhile, Newsom said his “office is coordinating in real time with local and state agencies to protect the surrounding community and ensure public safety.”

Flights at Los Angeles International Airport were not impacted by the fire, a spokesperson for the airport told CNN.

People stand nearby as firefighters work to contain a large fire that broke out at the Chevron refinery in El Segundo, California, on Thursday.

Daniel Cole/Reuters

El Segundo Mayor Chris Pimentel told KCAL the city’s fire station is only a quarter mile from the refinery, so crews were able to respond “immediately.”

“Obviously, we are very concerned, and there is a lot of investigative work to be done to see what has happened,” the mayor said.

The El Segundo refinery, built in 1911, processes 276,000 barrels of crude oil daily, the company said on its website.

This story has been updated with additional information.

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Those “reciprocal” tariffs were expected to go into effect Wednesday. In some cases, the letters Trump sent specify new “reciprocal” tariff rates that are higher or lower compared to April levels.

Japan’s Prime Minister Shigeru Ishiba and South Korea’s President Lee Jae-myung were the first recipients of Trump’s letters.

Both countries will face a 25% tariff come August 1, Trump said in posts on Truth Social displaying the letters, potentially giving countries more time to negotiate deals. Around two hours later, he announced similar letters were sent to Malaysia, Kazakhstan, South Africa, Myanmar and Laos, informing their leaders of new tariff rates as high as 40%.

Then later in the day, he posted seven new letters sent to leaders of Tunisia, Bosnia and Herzegovina (which is set to reach a 30% tariff), Indonesia, Bangladesh, Serbia, Cambodia and Thailand, putting the running total at 14 letters delivered on Monday.

In the letters, Trump said he takes particular issue with the trade deficits the United States runs with them, meaning America buys more goods from there compared to the amount that American businesses export to those countries. Trump also said the tariffs would be set in response to other policies that he deems are impeding American goods from being sold abroad.

He encouraged country leaders to manufacture goods in the United States to avoid tariffs.

This comes ahead of his initial 12:01 a.m. ET July 9 deadline for countries to make deals or face the threat of higher tariffs. That date marks the end of the pause on “reciprocal” tariffs, which briefly went into place in April. Since then, impacted countries have faced a minimum 10% tariff.

Related articleTariffs, explained: What Trump wants from all these trade deals

In all 14 letters, Trump threatened to raise tariffs even higher than the specified rates if a country retaliated against the United States with tariffs of their own. Trump said these rates would be “separate from all Sectoral Tariffs,” meaning, for instance, the new tariff won’t be stacked on top of the current auto tariff of 25%, the White House confirmed. That would apply to any future sector-specific tariffs, too, a White House official said.

Despite the many trade qualms Trump has broadcast as having with the European Union, prompting him to threaten higher tariffs on several occasions, the trading bloc appears to have not received a letter from him.

“We’re not going to comment on letters that we haven’t received,” Olof Gill, a European Commission spokesperson, told reporters Monday afternoon.

“My understanding is that we can now expect an extension of the current status quo until August 1 to give further time for the EU and the US to reach an agreement in principle on a mutually beneficial agreement that works for both sides,” Simon Harris, Irish Minister for Foreign Affairs and Trade, said in a statement on Monday.

What’s at stake

Collectively, the US bought $465 billion worth of goods last year from the 14 countries that received letters on Monday, according to US Commerce Department figures. Japan and South Korea, America’s sixth- and seventh-largest trading partners, accounted for 60% of that, shipping a total of $280 billion worth of goods to the US last year.

The prospect of higher tariffs on goods could translate into higher prices for American consumers. Among the top goods America imports from South Korea and Japan, for example, are cars, auto parts, semiconductors, pharmaceuticals and machinery. Trump has placed or threatened to levy industry-specific tariffs on many of these goods.

In April, Japan was set to face a 24% tariff, while South Korea was set to face a 25% tariff.

While the other countries ship less to the US compared to Japan and South Korea, in many cases they are among the top foreign sources of goods.

For instance, South Africa, which is set to face 30% tariffs, accounted for roughly half of the platinum the US imported from other countries last year and was the top foreign supplier of it.

Malaysia, which is set to face a 24% tariff versus the 25% rate Trump announced in April, was the second-top source of semiconductors shipped to the US last year, with Americans purchasing $18 billion worth of them from there.

Meanwhile, Bangladesh, Indonesia and Cambodia are top manufacturing hubs for apparel and accessories.

Trump’s letter to Cambodia’s prime minister threatened a tariff rate of 36%, 13 percentage points lower than what had been in place in April, before it was paused.

Stocks sink

Stocks dropped lower midday after Trump announced the first batch of letters and continued to fall as Trump announced tariffs of varying rates from 25% to 40% on countries including Myanmar, Malaysia, Kazakhstan, Laos and South Africa.

Related articleStocks tumble after Trump announces 25% tariffs on Japan and South Korea starting August 1

Despite Trump saying country-specific tariffs won’t be stacked on top of sectorial ones, shares of auto companies that have a heavy manufacturing presence in Japan and South Korea declined sharply. US-listed shares in major Japanese automakers Toyota, Nissan and Honda dropped by 4%, 7.16% and 3.86%, respectively.

Those declines, however, may reflect the increased likelihood of Trump potentially raising tariffs on cars from the two countries should they retaliate against the general 25% tariffs, were they to go into effect, by slapping higher tariffs on American goods.

“These Tariffs may be modified, upward or downward, depending on our relationship with on our relationship with your Country. You will never be disappointed with The United States of America,” Trump ended the letters before signing off.

The Dow closed lower by 422 points, or 0.94%. The S&P 500 fell 0.79% and the tech-heavy Nasdaq Composite fell 0.92%. The three major indexes posted their worst day in about three weeks.

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Taiwan has added China’s tech titan Huawei and chip giant Semiconductor Manufacturing International Corporation (SMIC) to its export control list, stepping up efforts to align with Washington’s crackdown on companies driving Beijing’s artificial intelligence ambitions.

Citing “concerns over weapons proliferation and national security,” Taiwan’s International Trade Administration updated its list of what it calls strategic high-tech commodities entities last week to include Huawei and SMIC, among hundreds of other entities in China, Myanmar, Russia, Iran and Pakistan. Under the restrictions, Taiwanese businesses will be required to apply for permits before exporting to the listed firms.

The new rules were announced amid escalating US-China tensions over advanced technologies including semiconductors and AI. Washington has grown increasingly concerned about its tech being used in Chinese military applications. Just last month, the Trump administration restricted sales of chip design software to China in its ongoing trade war with Beijing.

The latest move by Taiwan underscores its government’s active approach in working with the US – its largest unofficial partner – to plug any loopholes in tech restrictions against Beijing. China claims self-governing Taiwan as part of its territory despite having never controlled it.

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, which supplies Apple and AI giant Nvidia, had produced microchips for Huawei until 2020, when the first Trump administration effectively banned it from supplying the Chinese company. Since the ban, Huawei has turned to SMIC – which has also faced US restrictions – to source chips.

With US restrictions already in place, experts said Taiwan’s move to tighten the screws on Huawei, SMIC and their subsidiaries is largely symbolic. CNN has reached out to Huawei and SMIC for comment.

“This reflects the Taiwanese government’s clearer intent to align its export control regulations more closely with those of the United States,” said Min-yen Chiang, a nonresident fellow at the Research Institute for Democracy, Society, and Emerging Technology, a government-funded think tank in Taipei. “In fact, Taiwan is the second country in the world – after the US – to publicly place SMIC and Huawei on an export control list.”

Taiwan’s “proactive” step signals that the government recognizes the need to play an active role in cooperating with the American government and addressing the security concerns at stake, Chiang said.

“From what I understand, the US government has long hoped that Taiwan would take greater initiative in regulating sensitive exports on its own, rather than simply following Washington’s lead,” he added.

The Taiwan Semiconductor Manufacturing Company fabrication plant in Phoenix, Arizona.

Bloomberg/Getty Images

Late last year, TSMC-made chips were reportedly found in a Huawei AI processor. While TSMC clarified it had not been supplying Huawei since 2020, the report stoked concerns in Washington that chips made by the Taiwanese company and intended for another Chinese firm, Sophgo, might have been rerouted to Huawei.

Reuters has reported that the US Department of Commerce has been investigating the incident and that TSMC could face a penalty of $1 billion or more from Washington. In November, the department also ordered the Taiwanese company to halt shipments of advanced chips to China.

“While the new controls aren’t a direct response to that specific incident, the discovery of TSMC-made chips in Huawei products last year served as a wake-up call: It prompted both TSMC and the Taiwan government to re-examine existing oversight mechanisms and identify gaps in preventing indirect supply chain loopholes,” said Brady Wang, associate director at Counterpoint Research, a market analysis firm.

Chip war

During his first term, US President Donald Trump imposed targeted restrictions on companies like Huawei, banning American firms from partnering with them and restricting the sale of chips to them.

In 2022, then-President Joe Biden intensified these efforts, curbing the sale of advanced semiconductors to China over concerns they could power its military. The controls were subsequently expanded to include restrictions on sales of chipmaking equipment, high-bandwidth memory chips and even products manufactured outside the United States using American technology.

The mounting restrictions have put heavy pressure on China’s strategic sectors that Chinese leader Xi Jinping has prioritized, including semiconductors and AI. But Huawei and SMIC have made some strides in the production of advanced chips, and Beijing has pinned its hopes on these companies to lead innovation.

Customers shop in a Huawei store in Haian City in China’s Jiangsu province in June.

NurPhoto/Getty Images

Although the US restrictions initially crippled its business, Huawei made a remarkable comeback in 2023 with the introduction of its Mate 60 smartphone, powered by advanced chips made by SMIC. The launch of the handset even triggered investigations by the US government.

Galen Zeng, a senior research manager at IDC, a market intelligence firm, said Monday that the timing of Taiwan’s export controls reflects multiple strategic considerations, including Washington’s concerns about the advanced chips found in Huawei’s devices.

“Coupled with US concerns over indirect supply routes, these developments have pushed Taiwan to tighten its export control mechanisms to enhance supply chain transparency,” he said.

While Huawei and SMIC may need to seek domestic alternatives in response to the export controls, restrictions like these would ultimately benefit Chinese suppliers, Zeng said.

“In the long term, this is likely to accelerate China’s push for semiconductor self-sufficiency, benefiting domestic equipment, materials, and component suppliers,” he said.

In a rare interview last week, Ren Zhenfei, the founder of Huawei, downplayed the impact of the US technology restrictions on Huawei and China overall, while saying its chip technology remains one generation behind US technology.

“There’s actually no need to worry about the chip issue. By using methods like stacking and clustering, the computational results are comparable to the most advanced levels,” he said, referring to the industry approach of bundling multiple chips to achieve higher performance.

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A view of China’s Ministry of Commerce on March 31, 2025 in Beijing, China.

VCG/Getty Images

BeijingReuters — 

China announced anti-dumping duties as high as 74.9% Sunday on imports of POM copolymers, a type of engineering plastic, from the United States, the European Union, Japan and Taiwan.

The Commerce Ministry’s findings conclude a probe launched in May 2024, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports.

POM copolymers can partially replace metals such as copper and zinc and have various applications including in auto parts, electronics and medical equipment, the ministry has said.

In January, the ministry said initial investigations had determined that dumping was taking place and implemented preliminary anti-dumping measures in the form of a deposit starting from January 24.

According to Sunday’s announcement, the highest anti-dumping rate of 74.9% was levied on imports from the United States, while European shipments will face a 34.5% duty.

China slapped 35.5% duties on Japanese imports, except for Asahi Kasei Corp, which received a company-specific rate of 24.5%. A general duty of 32.6% was placed on imports from Taiwan, while Formosa Plastics received a 4% tariff and Polyplastics Taiwan 3.8%.

Hopes have risen that the US-China trade war is easing after the two sides said they had agreed to slash reciprocal tariffs in a 90-day truce, a deal that state mouthpiece the Global Times said on Friday should be extended.

The Asia-Pacific Economic Cooperation group of nations warned of “fundamental challenges” facing the global trading system in a communique on Friday after a meeting in South Korea.

Related articleBullying only leads to self-isolation, Xi says day after US-China tariff truce

On Monday, Asian shares slipped as a mixed bag of Chinese economic data showed the domestic economy was struggling even as US tariffs began to bite into exports. Growth in China’s industrial output and retail sales slowed in April, as a trade war threatened to dampen momentum in the world’s second-largest economy.

However, the impact of tariffs on China’s economic activity has yet to cause significant pain, as industrial output fared better than economists’ expectations and unemployment eased.

Industrial output in April grew 6.1% from a year earlier, slowing from 7.7% growth in March, official data showed. The data released by the National Bureau of Statistics surpassed expectations for a 5.5% increase in a Reuters poll of 24 analysts.

Retail sales, a gauge of consumption, rose 5.1% in April, slowing from a 5.9% increase in March. Economists had expected retail sales to grow 5.5%.

Fixed asset investment expanded 4.0% in the first four months of 2025 from the same period a year earlier, compared with expectations for a 4.2% rise. It grew 4.2% in the first quarter.

Property investment fell 10.3% in the first four months of 2025 from a year earlier, following a drop of 9.9% in the first quarter, official data showed. Property sales by floor area shrank 2.8% in January-April from the previous year, after declining 3.0% in the first three months. New construction starts measured by floor area were down 23.8%, versus a 24.4% slump in January-March.

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A laborer works at a rare earths mine in Nancheng county, Jiangxi province, China on March 14, 2012.

Stringer/Reuters

Hong KongCNN — 

Despite a 90-day truce in its trade war with the United States, China appears to be maintaining tight control over its rare earth exports – preserving a key source of leverage in future negotiations amid intensifying strategic rivalry with Washington.

As part of last week’s trade agreement in Geneva to temporarily roll back tariffs, China pledged to suspend or remove the “non-tariff” countermeasures it imposed on the US since April 2.

That has left businesses scrambling to find out whether that promise applies to China’s export controls on seven rare earth minerals and associated products, which were imposed on April 4 as part of its retaliation against US President Donald Trump’s “reciprocal” tariffs on Chinese goods.

Magnets made of these heavy rare earth elements are an essential part of everything from iPhones and electric vehicles to big-ticket weapons like F-35 fighter jets and missile systems. Yet their supply is completely dominated by China.

Fresh off the plane from the trade talks in Geneva last week, US trade representative Jamieson Greer sought to ease concerns surrounding this potential vulnerability. In a Fox News interview, he answered affirmatively when asked whether China had agreed to lift its export restrictions on rare earths as part of the truce.

“Yep, the Chinese have agreed to remove those countermeasures,” Greer said. “If they don’t do those things, we’re going to be back in a different situation. But I expect they’ll remove them.”

However, there’s little sign to suggest China is removing its newly imposed rare earth export control regime. If anything, according to experts and industry insiders, Chinese authorities appear to be strengthening implementation and ramping up oversight.

Related articleChina has a powerful card to play in its fight against Trump’s trade war

The system, introduced in April, does not ban exports outright, but requires government approval for each shipment. That had caused weeks long holdups as companies navigated the new regime, fueling fears among a wide range of American industries from automobile to defense.

“I would not be shocked to find that Mr Greer is expressing what he hopes will happen versus what has actually been negotiated to happen,” said Jon Hykawy, president of the Toronto-based industry advisory firm Stormcrow Capital.

“These controls are intended … to ensure that China does not run short of some materials that are needed for domestic Chinese priorities,” said Hykawy.

Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies (CSIS), said China’s export licensing regime is “here to stay” and “may stay for a long time,” allowing Beijing to retain its leverage in future trade talks with the US.

If the US were to turn around and renege on their tariff policy, China can easily withhold the required licenses, she said, adding that the licensing policy is dynamic by design, giving Beijing the power to decide which companies or countries can access its rare earth minerals and magnets at any given time.

New export licenses

Following the Geneva talks, China’s Commerce Ministry removed 28 US firms from its dual-use export control list and pulled 17 American companies from another trade and investment backlist. But the ministry made no mention of any changes to the exports control on rare earth minerals and magnets.

A spokesperson for the ministry said she had “no information to share” on whether China is lifting the export controls at a regular news conference last Friday.

Instead, Chinese authorities launched a crackdown on the smuggling of critical minerals – a broader category of resources that include rare earth elements. On May 12, the day US and China announced the tariff cuts, Chinese export regulators convened a meeting with authorities from multiple mineral-rich provinces with the aim to “prevent the illegal outflow of strategic minerals” and “strengthen oversight across every link of the production and supply chain.”

On the same day, Yuyuan Tantian, a social media account affiliated with state broadcaster CCTV, said in a post that “China’s rare earth export controls are continuing.”

Meanwhile, after weeks of delay, China has started to issue export permits for rare earth magnets – a development that experts say shows the new licensing system is up and running, rather than restrictions being eased.

Two Chinese rare earth magnet producers told CNN they had recently received licenses for exporting products containing dysprosium and terbium – elements that are often added to create more heat resistance in high-performance magnets commonly used in the automobile, aerospace and military industries.

The approvals are granted under a “one batch, one license” rule, meaning a new permit is required for each shipment and cannot be reused, according to the companies.

One of the companies received its first export license for a shipment heading to Southeast Asia. It has since been granted several other licenses for exports to Europe, including the carmaker Volkswagen in Germany.

“We haven’t received any indications about the (export control) system easing up,” a person close to the company told CNN.

Volkswagen said in a statement that its suppliers have received indications that “a limited number of export licenses have been granted.”

A cargo ship offloads imported iron ore at the Qingdao Port in Shandong province, China, on March 6, 2025.

Costfoto/NurPhoto/Getty Images

Question mark over US defense firms

Baskaran, from CSIS, said that instead of lifting the export controls on rare earths, China removed 28 American firms from its export control list. That means those companies, mostly aerospace and defense firms, are no longer banned from accessing dual-use materials from China, and their Chinese suppliers can now apply for export licenses for rare earth magnets.

But it remains to be seen whether Beijing will ultimately give out licenses to American defense firms.

China’s rare earth export controls were “specifically designed to hit the US defense industry, and I cannot envision China stepping back from that,” said Thomas Kruemmer, director of the Singapore-based mineral and metal supply chain firm Ginger International Trade and Investment.

Under the new rules, exporters must include information about end-users in their applications, which take up to 45 working days to be approved.

“I am sure that in case of defense contractors, the Chinese Commerce Ministry will raise pesky questions, which the Americans may be unwilling to answer or may need Pentagon permission to answer,” Kruemmer said.

“This way they can conveniently delay the issuance of dual-use product export licenses beyond the self-set 45-day deadline, perhaps even beyond this 90-day (truce) window. And it still has the option to reject the license applications anyway.”

The licensing rules can also offer China visibility into where the rare earth magnets end up.

“You can still get the material, but you have to fill out paperwork, describe to China who the end user is. You’re going to give all this information and then (China) can see inside your downstream customer base and use and look for further vulnerability,” said James Kennedy, president of Three Consulting, a rare earths consultancy based in St Louis, Missouri.

“So it’s very smart. They get a looking glass into what you’re doing.”

‘Geopolitical weapon’

For decades, the US and other countries have been dependent on China’s supply of rare earth minerals, which are difficult, costly and environmentally polluting to extract and process. China accounts for 61% of global mined rare earth production, but its control over the processing stage is much higher at 92% of the global output, according to the International Energy Agency.

The April export controls are far from the first time Beijing has leveraged its dominance in the industry. In 2010, China halted shipments of rare earths to Japan for nearly two months over a territorial dispute. In late 2023, it imposed a ban on rare earth extraction and separation technologies.

Beijing has also curbed exports of other critical minerals that are vital to the economy and global supply chains – including outright bans on the shipments of gallium, germanium, antimony and so-called superhard materials to the US.

“China’s control over rare earths, cobalt, gallium and all these critical materials is a geopolitical weapon of never-before measured and seen effect,” Kennedy said. “And at the end of the day, what this does is, it creates a lot of uncertainty. And that in itself is a powerful weapon.”

Baskaran said that by granting some of its first export licenses of rare earth magnets to Volkswagen, China is sending a pointed geopolitical message.

“Germany is at the height of geopolitical crossfire. The US is unhappy that Germany has been overtly quite friendly with China. So, by giving it one of the first licenses, China is sending a very positive signal in the Chinese-German relationship,” she said. “In this era of rising tension between the world’s two geopolitical superpowers, the licensing system may stay as a larger form of power.”

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The exemptions apply to integrated circuits, also known as microchips or semiconductors, according to the agencies. They found out about the exemptions, which have not been officially announced, on Thursday.

On April 12, China raised its reciprocal tariffs to 125% for all goods originating from the United States, in response to US President Donald Trump’s move to hike levies on Chinese goods to a sky-high 145%.

For months, Beijing has been projecting an air of strength and confidence in its ability to withstand an escalating trade war with the US. But these exemptions suggest it needs to roll back some levies on crucial items that it cannot make at home or source elsewhere. Besides semiconductors, China has decided to grant exemptions on some aircraft parts, including engines and landing gear, according to an aviation executive.

Semiconductors are an indispensable part of just about every electronic device. They are difficult to make because of the high cost of development and the level of knowledge required, meaning much of the production is concentrated among a handful of suppliers.

Although China has made strides in developing its own semiconductor industry, it is still highly dependent on imports of chips and chipmaking equipment from the United States, Taiwan, South Korea, Japan and the Netherlands. Last year, China imported $11.7 billion worth of semiconductors from the US, according to customs data.

Duncan Clark, chairman of technology investment advisory firm BDA, said the exemptions suggest China does not have “autonomy in chips.”

“It has ambition for that. But basically, it’s going to be a while before it can be fully autonomous,” he said.

Ray Wang, a Washington-based analyst focusing on US-China tech competition, said the exemptions benefit American chipmakers such as Intel, Texas Instruments and Global Foundries, which would be affected by the Chinese tariffs.

Chinese authorities have not confirmed the exemptions on semiconductors publicly. The General Administration of Customs and the customs offices in Shenzhen and Zhongshan, both port cities in Guangdong province, said they were not aware of the exemptions.

A spokesperson for China’s Foreign Ministry said he was not familiar with the situation, when asked about the exemptions at a regular news conference Friday. CNN has reached out to the Chinese Commerce Ministry for comment.

Chen Shaoling, a manager at Zhengnenliang Supply Chain, an import agency, told CNN that she found out on Thursday that tariffs on eight kinds of integrated circuits, covering most semiconductors except for memory chips, had been waived to zero. The discovery was made during a routine custom clearance for her customers, she added.

“We only found out after we filed the declaration — without doing that, we wouldn’t have known,” Chen said. “The news is now spreading like wildfire.”

Caijing, a Chinese business magazine, reported on the exemptions on Friday, citing multiple tech companies that import semiconductors, including one based in Shanghai. The report was removed roughly three hours after it was published.

Critical components

The exemptions aren’t the first time Beijing has come to the aid of its tech sector, which is starting to enjoy a closer relationship with officialdom after a years-long regulatory crackdown.

Earlier this month, China removed tariffs on chips designed by American firms but manufactured outside the country. For example, US AI chip giant Nvidia’s products are largely made in Taiwan by Taiwan Semiconductor Manufacturing Company (TSMC).

On April 11, the state-backed China Semiconductor Industry Association said in a post on its official social media channel that the “declared country of origin” should be the location of the factory where the product was made.

That means semiconductors from American chip designers like Qualcomm and Nvidia, manufactured outside the US would not be subject to China’s 125% tariff on US goods.

This week’s exemptions appear to apply only to logic chips, which process and control data flow, an area dominated by the US. Memory chips, which store and retrieve data, are not included in the exemptions. South Korean firms Samsung and SK Hynix are the leaders in this market.

The local customs authority in Shenzhen appears to have notified some companies about the update.

“Fantastic news! We have received a new notice from China Customs, stating that eight tariff codes related to semiconductors/integrated circuits are now exempt from additional tariffs on US imports,” Shenzhen HJET Supply Chain wrote in a post on its official social media account Thursday.

“This means that imports originating from the United States under these codes will have their tariffs reduced to zero upon entry into China,” the post added.

A staff member at the company who picked up a call from CNN confirmed the new policy, saying her company was notified by local customs on Thursday.

Taihang Semiconductor, a company also based in Shenzhen that imports chips, told CNN it has received a notice from customs, though it declined to provide further details. “It’s definitely a good thing,” a staff member said when contacted by CNN.

Wider exemptions

China is granting exemptions in other sectors outside of semiconductors, including aviation, according to Olivier Andries, the chief executive of French engine maker Safran.

“Yesterday night, China has decided to exempt from tax any deliveries of engines, nacelles, landing gears or parts,” he said on an earnings call Friday.

The company is a major supplier to China’s aviation industry. It makes the oxygen systems and nacelles (the structure that houses the engines and connects them to the wings) for the C919, China’s first homegrown mainline passenger plane. The C919’s LEAP-1C engines are produced by CFM, a joint venture between US engine-maker GE Aviation and Safran.

According to Reuters, which cited an unnamed source, the Chinese government is also asking businesses to identify goods that could be eligible for exemption from its reciprocal US tariffs.

The world’s two largest economies are at each other’s throats in a bitter tariff fight that has roiled global markets, disrupted supply chains and stoked recession fears.

On April 11, Trump exempted imports of electronics such as smartphones and computers from his “reciprocal” tariffs. That exemption has had a major impact on tech giants like Apple, which make iPhones and other products in China.

In recent days, Trump has softened his tone, saying the astronomical tariffs on Chinese goods will “come down substantially” and promised to be “very nice” at the negotiating table as he attempts to get Chinese leader Xi Jinping to make the first move to initiate trade talks.

But Beijing has brushed off Trump’s apparent olive branch, demanding the US should remove all tariffs on China if it wants to talk. Chinese officials have also repeatedly refuted Trump’s claims that the two sides are in talks about trade.

“There have been no negotiations between China and the United States on the issue of tariffs. The US should not mislead the public,” Guo Jiakun, a spokesperson for the Chinese Foreign Ministry, said at the regular news conference Friday.

The rebuttal came after Trump said on Thursday that his administration had meetings with Chinese officials regarding trade earlier in the morning.

This story has been updated with additional information.

CNN’s Beijing bureau and Olesya Dmitracova contributed reporting.

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