China is reportedly considering a new export-control mechanism that would speed approvals for civilian companies in the U.S. while blocking shipments to firms tied to the American defense sector.

The proposed "validated end-user" (VEU) system would aim to ease the flow of rare-earth magnets and other restricted materials for nonmilitary uses, while keeping them out of U.S. military supply chains, sources told The Wall Street Journal.

The approach mirrors aspects of U.S. export policy, under which pre-cleared facilities can receive certain controlled items under general authorization rather than case-by-case licenses.

In China's version, companies with any defense links could be excluded, a design that may complicate sourcing for aerospace and automotive manufacturers that straddle commercial and defense work.

The Journal reported that despite public commitments to ease curbs after an Oct. 30 trade truce between President Xi Jinping and President Donald Trump, China appears poised to retain selective controls even as it seeks to reassure civilian buyers.

The contemplated system underscores Beijing's effort to calibrate its leverage over materials ubiquitous in consumer products — such as electric vehicles and airliners — but also critical in jet fighters, submarines, and drones.

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Rare-earth magnets are a choke point where China dominates mining, processing, and manufacturing.

Implementation details will determine how much relief U.S. industry actually sees. The Journal noted that China's rare-earth magnet exports to the U.S. fell 29% in September from August, suggesting that even with rhetoric about easing, approvals have remained tight in practice heading into the truce.

Companies have complained in recent months about slower and less predictable licensing, and some are exploring alternative sources despite potential access under any new VEU arrangement.

The discussion comes as both governments continue to use export rules as tools of statecraft: Washington has tightened controls on advanced technologies headed to China, while Beijing has broadened licensing on critical minerals and magnet technologies under national security rationales.

Any Chinese VEU program would likely preserve inspection or compliance requirements for approved buyers, but Beijing has not said which firms could qualify or when a system might launch.

For now, U.S. manufacturers with mixed civilian-defense portfolios should expect continued case-by-case scrutiny — and possible delays — on Chinese rare-earth inputs, according to the report.

Newsmax writer Eric Mack and Reuters contributed to this report.

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