China still squeezing rare-earth exports despite U.S. pact

Todayville

Published

4 days ago

5 minute read

Quick Hit:

Weeks after agreeing to ease restrictions, China continues to stall rare-earth magnet exports, causing Western manufacturers to scramble for critical components and raising fears that Beijing is weaponizing its supply chain leverage.

Key Details:

Applications for rare-earth magnet exports are being delayed or denied despite a U.S.-China agreement to resume trade.
Western firms report that supply remains critically low, with some forced to redesign products or ship components by air to avoid shutdowns.
China’s approval process demands sensitive commercial data, fueling concerns of industrial espionage and political pressure.

Diving Deeper:

Despite pledging to ease export restrictions on rare-earth magnets in a deal with the United States earlier this month, China continues to strangle the flow of these critical components, leaving Western industries on edge and trade tensions simmering.

Western companies say the situation has barely improved since China’s Ministry of Commerce promised to accelerate export license approvals. In practice, approvals remain rare, applications take weeks to process, and many are outright rejected. The bottleneck is hitting manufacturers hard—particularly automakers and electronics producers—who rely on China’s near-monopoly of the world’s most powerful rare-earth magnets.

“It’s hand to mouth—the normal supply-chain scrambling that you have to do,” said Lisa Drake, Ford’s VP of industrial planning for EVs. Though she acknowledged some improvement, she made clear the shortages are forcing operational gymnastics to avoid production halts.

The restrictions stem from export controls Beijing implemented in April, shortly after President Donald Trump imposed heavy tariffs on Chinese goods. While China claimed the license system was meant to regulate military-use exports, the real-world effect has been a sharp drop in rare-earth magnet shipments to the U.S.—down 93% in May compared to last year.

Although the White House announced that China had agreed to resume exports in exchange for reduced U.S. restrictions on certain American goods, the ground reality tells a different story. Export licenses are now limited to six months, and applicants must submit highly sensitive commercial details—such as magnet integration designs and buyer contacts—raising red flags for many Western firms. When companies decline to provide such data, licenses are often denied or stalled for 45 days or more.

“Yes, the export restrictions have been paused on paper. However, ground reality is completely different,” said Neha Mukherjee of Benchmark Mineral Intelligence, citing chronic bureaucratic delays.

Chinese officials claim they’ve approved “a certain number” of licenses, but industry insiders say approvals favor large, state-backed magnet companies. Smaller Chinese producers are suffering under the export squeeze and some are trying to collaborate with foreign buyers to bypass restrictions—such as promoting less-powerful magnets not subject to the controls.

However, these substitutes are often inadequate for high-performance applications like automotive motors, AI servers, and defense systems. Some manufacturers have begun redesigning their products, while others are resorting to expensive airfreight to keep assembly lines alive. As one U.S. importer put it, “These are the things you don’t hear about, how much money it is taking to keep these factories running, you know, limping along.”

Meanwhile, Europe is growing more vocal. Germany’s top industry association recently called on its government to challenge Beijing’s tactics, warning that “licensing procedures must not be used as a means of exerting political pressure.”

All signs point to a calculated effort by Beijing to maintain leverage over the West—despite public commitments to ease trade. With China controlling 90% of global supply for these crucial materials, the U.S. and its allies are now forced to confront a familiar truth: when it comes to rare earths, China holds the cards, and it’s not afraid to play them.

Related Topics:ChinaRareEarthExports ChinaRareEarthMagnets ChinaUSTrade ChinaWeaponizingSupplyChain MXMNews

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Massive government child-care plan wreaking havoc across Ontario

Published on June 30, 2025

Todayville

From the Fraser Institute

By Matthew Lau

It’s now more than four years since the federal Liberal government pledged $30 billion in spending over five years for $10-per-day national child care, and more than three years since Ontario’s Progressive Conservative government signed a $13.2 billion deal with the federal government to deliver this child-care plan.

Not surprisingly, with massive government funding came massive government control. While demand for child care has increased due to the government subsidies and lower out-of-pocket costs for parents, the plan significantly restricts how child-care centres operate (including what items participating centres may purchase), and crucially, caps the proportion of government funds available to private for-profit providers.

What have families and taxpayers got for this enormous government effort? Widespread child-care shortages across Ontario.

For example, according to the City of Ottawa, the number of children (aged 0 to 5 years) on child-care waitlists has ballooned by more than 300 per cent since 2019, there are significant disparities in affordable child-care access “with nearly half of neighbourhoods underserved, and limited access in suburban and rural areas,” and families face “significantly higher” costs for before-and-after-school care for school-age children.

In addition, Ottawa families find the system “complex and difficult to navigate” and “fewer child care options exist for children with special needs.” And while 42 per cent of surveyed parents need flexible child care (weekends, evenings, part-time care), only one per cent of child-care centres offer these flexible options. These are clearly not encouraging statistics, and show that a government-knows-best approach does not properly anticipate the diverse needs of diverse families.

Moreover, according to the Peel Region’s 2025 pre-budget submission to the federal government (essentially, a list of asks and recommendations), it “has maximized its for-profit allocation, leaving 1,460 for-profit spaces on a waitlist.” In other words, families can’t access $10-per-day child care—the central promise of the plan—because the government has capped the number of for-profit centres.

Similarly, according to Halton Region’s pre-budget submission to the provincial government, “no additional families can be supported with affordable child care” because, under current provincial rules, government funding can only be used to reduce child-care fees for families already in the program.

And according to a March 2025 Oxford County report, the municipality is experiencing a shortage of child-care staff and access challenges for low-income families and children with special needs. The report includes a grim bureaucratic predication that “provincial expansion targets do not reflect anticipated child care demand.”

Child-care access is also a problem provincewide. In Stratford, which has a population of roughly 33,000, the municipal government reports that more than 1,000 children are on a child-care waitlist. Similarly in Port Colborne (population 20,000), the city’s chief administrative officer told city council in April 2025 there were almost 500 children on daycare waitlists at the beginning of the school term. As of the end of last year, Guelph and Wellington County reportedly had a total of 2,569 full-day child-care spaces for children up to age four, versus a waitlist of 4,559 children—in other words, nearly two times as many children on a waitlist compared to the number of child-care spaces.

More examples. In Prince Edward County, population around 26,000, there are more than 400 children waitlisted for licensed daycare. In Kawartha Lakes and Haliburton County, the child-care waitlist is about 1,500 children long and the average wait time is four years. And in St. Mary’s, there are more than 600 children waitlisted for child care, but in recent years town staff have only been able to move 25 to 30 children off the wait list annually.

The numbers speak for themselves. Massive government spending and control over child care has created havoc for Ontario families and made child-care access worse. This cannot be a surprise. Quebec’s child-care system has been largely government controlled for decades, with poor results. Why would Ontario be any different? And how long will Premier Ford allow this debacle to continue before he asks the new prime minister to rethink the child-care policy of his predecessor?

Matthew Lau

Adjunct Scholar, Fraser Institute

Business

Canada Caves: Carney ditches digital services tax after criticism from Trump

Published on June 30, 2025

Todayville

From The Center Square

By Brett Rowland

Canada caved to President Donald Trump demands by pulling its digital services tax hours before it was to go into effect on Monday.

Trump said Friday that he was ending all trade talks with Canada over the digital services tax, which he called a direct attack on the U.S. and American tech firms. The DST required foreign and domestic businesses to pay taxes on some revenue earned from engaging with online users in Canada.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” the president said. “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”

By Sunday, Canada relented in an effort to resume trade talks with the U.S., it’s largest trading partner.

“To support those negotiations, the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, announced today that Canada would rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States,” according to a statement from Canada’s Department of Finance.

Canada’s Department of Finance said that Prime Minister Mark Carney and Trump agreed to resume negotiations, aiming to reach a deal by July 21.

U.S. Commerce Secretary Howard Lutnick said Monday that the digital services tax would hurt the U.S.

“Thank you Canada for removing your Digital Services Tax which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America,” he wrote on X.

Earlier this month, the two nations seemed close to striking a deal.

Trump said he and Carney had different concepts for trade between the two neighboring countries during a meeting at the G7 Summit in Kananaskis, in the Canadian Rockies.

Asked what was holding up a trade deal between the two nations at that time, Trump said they had different concepts for what that would look like.

“It’s not so much holding up, I think we have different concepts, I have a tariff concept, Mark has a different concept, which is something that some people like, but we’re going to see if we can get to the bottom of it today.”

Shortly after taking office in January, Trump hit Canada and Mexico with 25% tariffs for allowing fentanyl and migrants to cross their borders into the U.S. Trump later applied those 25% tariffs only to goods that fall outside the free-trade agreement between the three nations, called the United States-Mexico-Canada Agreement.

Trump put a 10% tariff on non-USMCA compliant potash and energy products. A 50% tariff on aluminum and steel imports from all countries into the U.S. has been in effect since June 4. Trump also put a 25% tariff on all cars and trucks not built in the U.S.

Economists, businesses and some publicly traded companies have warned that tariffs could raise prices on a wide range of consumer products.

Trump has said he wants to use tariffs to restore manufacturing jobs lost to lower-wage countries in decades past, shift the tax burden away from U.S. families, and pay down the national debt.

A tariff is a tax on imported goods paid by the person or company that imports them. The importer can absorb the cost of the tariffs or try to pass the cost on to consumers through higher prices.

Trump’s tariffs give U.S.-produced goods a price advantage over imported goods, generating revenue for the federal government.