US tariffs to add support for rare earth prices outside China
Trump 2.0 is on a trade warpath
From Tuesday of this week, the US will levy a 10% tariff on imports of “all articles” from China, over and above any other duties, fees or tariffs already in place.
The move is a boon for existing and emerging producers of NdFeB magnets outside of China, and especially the US where a 25% import tariff on permanent magnets from China is already slated to come into effect from January 1, 2026.
Should the newly enacted 10% import tariff (plus pre-existing 2.1%) be maintained into next year and the planned 25% increase be levied on top, the combined 37.1% duty would go a long way to help level the playing field against China’s highly subsidized and hyper competitive rare earths industry.
For US-based importers of China-made NdFeB magnets, including automotive, robotics and advanced air mobility OEMs, their bill of magnet materials is poised to increase by 10% from today and potentially 35% by next year, notwithstanding any movements in baseline prices in the interim.
This means that a US-based magnet maker selling at a ~35% premium to China-priced materials could become a cost-competitive alternative to China for OEMs in the US currently importing from the nation. Similarly, magnet makers in Europe, Japan, South Korea, Thailand or elsewhere outside of China can also expect to sell at a premium to US consumers, at least until (if ever) the US landscape becomes oversaturated with supplies.
In Europe in particular, the lack of existing and emerging NdFeB magnet production capacity relative to the region’s current import volumes from China each year will likely make demand for those limited domestic supplies high in the years ahead as the EU seeks to address its extreme import reliance on China.
At the same time, however, Europe-based manufacturers of NdFeB magnets will see tangible opportunities to sell their limited supplies to US-based consumers at a premium thereby compelling Europe-based magnet buyers to match the US premium as a means of securing those supplies. And the same can be said to some degree for Japan, South Korea, Thailand and other regions outside China.
Consequently, the rising tide of US tariffs on imports from China stands to float all boats with respect to NdFeB magnet prices outside of China, as well as prices of other rare earth materials that the US imports in abundance (e.g., lanthanum compounds) which are subject to an immediate 10% tariff increase from yesterday, in addition to any existing levies already in place.
Existing and emerging rare earth magnet and magnetic alloy makers outside of China poised to benefit include MP Materials, Vacuumschmelze, Noveon Magnetics, USA Rare Earth, Neo Performance Materials, Star Group, Proterial, Shin-Etsu, Daido Steel and TDK, among others.
Contact Adamas Intelligence or more information on existing and emerging alternative sources of supply.
More on this topic at Rare Earth Mines, Magnets & Motors 2025
Join us in Toronto in September 2024 for Rare Earth Mines, Magnets & Motors 2025 where we’ll explore this topic further with leading industry experts.
The two-day event will bring together business and technical leaders from across the global mine-to-OEM supply chain for high caliber discussions and networking at a 5-star venue.
Key themes of this year’s conference will include robotics, automation, advanced air mobility, and the emerging mine-to-magnet supply chain coming together upstream.
Special guest: Steve Wozniak, co-founder of Apple
More information: www.adamasevents.com
