Rare Earth stocks rallied in premarket trading. USA Rare Earth up 6.2%; NioCorp Developments up 4.8%; Energy Fuels, MP Materials up over 1% each.

Markets cheered in early May when the US and China agreed in Geneva to lower tariffs and other barriers. But after a few weeks, the shine started to come off that deal, with China accusing the US of violating it with new restrictions and the US saying China failed to honor promises on rare earths.

China did not publicly promise that it would reverse the licensing requirement for all exports of the seven rare earths. In fact, in early May the Asian power also launched a domestic campaign to stop smuggling of critical minerals, including rare earths, to ensure that all relevant exports go through the licensing and control system.

Chinese export controls work similar to the US’s, with a license required for each shipment, end-user certifications and information on applications required to be submitted, according to a recent report from the US-China Business Council.

The review period for dual-use rare earth export licenses is 45 working days under the current rules, according to commerce ministry guidelines, but that could vary.

China has gradually added to the products which require a license since it began its dual-use control system. As each new item was added to the list, exports initially slumped as the newly created licensing bureaucracy struggled to handle the sudden influx of applications.

Some firms from the US and other nations have started to obtain licences. Companies from one large Asian importer started getting licenses last week, according to an official from the country who asked not to be named.

“We are seeing some approvals come through — certainly slower than industry would like,” said Michael Hart, president of the American Chamber of Commerce in China. “Some of the delay is related to China working through their new system to approve exports, not that they are not allowing exports.”