On October 9th, China announced new restrictions on the export of rare earth minerals, adding barriers to access for key European industries and sparking the latest crisis in an ongoing trade war between the United States and China. European Union leaders are seeking a unified response with the United States and other G7 allies to secure access to these resources while signaling concern at Beijing’s new approach.
- China is the global leader in rare earth mineral processing, responsible for over 90% of global production. Access to these resources is considered a matter of national security for many countries as it serves as a major choke point in multiple critical industries, especially in defense, auto manufacturing, and electronics.
- China’s new measures give the Chinese government much greater control over both the export of rare earth minerals and the use of Chinese technology in foreign rare earth mineral extraction. They also exclude the resources’ export for military purposes, sparking concern from NATO and EU members keen to expand their defense capabilities in the face of growing Russian aggression. The measures are set to come into partial effect on November 8th and full effect on December 1st.
- The Trump administration threatened a 100% increase on tariffs for Chinese goods if Beijing’s restrictions were implemented. Administration officials are hopeful that dialogue with Chinese counterparts can resolve the dispute and prevent the controls’ implementation.
- European leaders are also seeking an amicable resolution through dialogue with Beijing. The European Union European Commissioner on Trade and Economic Security, Maros Sefcovic, stressed that unity within the European Union and the G7 was vital, while Danish foreign minister Lars Rasmussen believed that cooperation with the United States could pressure China to reconsider its implementation of the rare earth mineral controls.
A planned meeting between US president Donald Trump and Chinese president Xi Jinping in South Korea in late October will likely decide the fate of China’s new export controls and the transatlantic community’s response.
