China's chokehold on rare earths set to suffocate auto industry
Alarm over China's stranglehold on critical minerals grew on Tuesday as
global automakers
joined their US counterparts to complain that restrictions by China on exports of rare earth alloys, mixtures and magnets could cause production delays and outages without a quick solution.
German automakers became the latest to warn that China's export restrictions threaten to shut down production and rattle their local economies, following a similar complaint from an Indian EV maker last week.
China's decision in April to suspend exports of a wide range of
rare earths
and related magnets has upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.
The move underscores China's dominance of the critical mineral industry and is seen as leverage by China in its ongoing trade war with US President
Donald Trump
. Trump has sought to redefine the trading relationship with the US' top economic rival China by imposing steep tariffs on billions of dollars of imported goods in hopes of narrowing a wide trade deficit and bringing back lost manufacturing.
Trump and Chinese President Xi Jinping are expected to talk this week, White House spokeswoman Karoline Leavitt told reporters on Tuesday, and the export curbs are expected to be high on the agenda. "I can assure you that the administration is actively monitoring China's compliance with the Geneva trade agreement," she said.
MAGNETS HELD UP AT CHINA PORTS
Shipments of the magnets, essential for assembling everything from cars and drones to robots and missiles, have been halted at many Chinese ports while license applications make their way through the Chinese regulatory system. The restrictions have triggered anxiety in corporate boardrooms and nations' capitals- from Tokyo to Washington-as officials scrambled to identify limited alternative options amid fears that production of new automobiles and other items could grind to a halt by summer's end.
"If the situation is not changed quickly, production delays and even production outages can no longer be ruled out," Hildegard Mueller, head of Germany's auto lobby, said on Tuesday.
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