Beijing has deepened its stranglehold on critical minerals as well. It has set up new export restrictions that may well cripple European production capacities. Beginning in early April, these restrictions will target seven rare-earth elements and magnets. These materials are critical for hundreds of industrial uses, including those in electric vehicles and defense weapon systems.
The U.S. announced the export controls amidst a moment of rapidly deteriorating relations between the U.S. and China. This jump in pressure came after former President Donald Trump announced these would be “reciprocal” tariffs.…extends and deepens the impact of this move by signaling China’s willingness to compete in an escalating trade war with the U.S., which could upend international trade dynamics.
In addition to defense applications, rare-earth minerals serve a critical role in manufacturing everything from smartphones to electric vehicles. These examples include cerium oxide, bastnasite, neodymium oxide and lanthanum carbonate. Electric vehicles in particular require these materials for their motors and batteries. In much the same way, precision-guided, advanced weaponry depends on rare-earth elements to make them effective and lethally efficient.
On Wednesday, the European Union Chamber of Commerce in China presented a dire warning. They explained how China’s recently imposed export controls would bring production at European-based manufacturers to a halt within days. The chamber made it clear that time is of the essence. They noted that major shocks would be felt across all industries that depend on these essential minerals.
During a California visit, our delegation saw specimens of these rare-earth minerals. This exhibit emphasized the importance and growing need for these components in the global market. The Chamber’s comments underscore the danger of relying on a single country for essential materials. This worry is particularly acute considering today’s geopolitical climate.
Now it’s industry experts and advocates that are keeping a watchful eye on developments, weighing the possible consequences of China’s export controls. European manufacturers are just now coming to terms with the new threat of production delays. Consequently, businesses are forced to look for other suppliers or other materials to mitigate the risks that these regulations present.