US companies call on the government to postpone the ban on magnets from China. Insiders say some US defense companies are trying to negotiate exemptions

According to insiders, some US defense companies are trying to lobby Washington to postpone a procurement ban on Chinese made rare earth magnets. The Financial Times reported on the 18th that the ban stipulates that from January 1st next year, the US Department of Defense's contracts shall not use Chinese made samarium cobalt magnets and neodymium iron boron magnets.

According to reports, the ban stems from a regulation passed by the US Congress in 2018, which prohibits defense companies from supplying materials such as rare earth magnets, tungsten, tantalum, etc. to the US military if they originate from China. Abigail Hunter, Executive Director of the Security Critical Minerals Strategy Center, an advocacy group in the United States, stated that this move aims to allow the United States, rather than its competitors, to decide on the procurement methods for defense industrial base materials.

Rare earth magnets are widely used in fields such as electric vehicles, mobile phones, fighter jets, and weapon systems. However, global rare earth magnet production is currently highly concentrated in China. To reduce dependence on China, the US government has invested billions of dollars in the still nascent local rare earth industry for several consecutive years. However, multiple American experts warn that building a mature alternative supply chain will take at least several years.

According to informed sources, some US defense companies are appealing to Congress for exemptions on the grounds that they only account for a small portion of the global rare earth magnet market. Some analysts suggest that possible ways to delay the ban include incorporating it into this year's National Defense Authorization Act or issuing exemptions directly by the government. The Center for Strategic and International Studies warned in April that if US companies cannot significantly increase production in the next 8 months, it may not be feasible to implement the ban on schedule. The US Government Accountability Office also warned last year that although the Department of Defense has over 200000 suppliers assisting in the production of advanced weapons and equipment, the relevant departments have almost no knowledge of their raw material production locations. Most of the work carried out by the US to gain a deeper understanding of supply chain risks lacks overall coordination and has limited scope.