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Business Standard
2 hours ago
- Automotive
- Business Standard
EU warns China's rare earth export curbs may trigger supply crisis
The European Union has raised urgent concerns with China over its tightened export restrictions on rare earth elements and magnets, warning of a potential supply crisis that could cripple industrial output across the bloc. EU Trade Commissioner Maroš Šefcovic pressed Chinese Commerce Minister Wang Wentao on the issue during talks in Paris this week, calling the situation 'extremely disruptive' and 'alarming' for key sectors, especially automotive manufacturing. 'Rare earths and permanent magnets are absolutely essential for industrial production — from cars to washing machines,' Šefcovic said on Wednesday. 'If the issue isn't addressed, there could be huge production difficulties in a short period of time.' China's response to Trump tariffs affects global partners China, which supplies nearly 90 per cent of the world's rare earths, imposed export controls in April following the latest round of reciprocal tariffs from US President Donald Trump. The curbs now require export licences for seven rare earth elements, including dysprosium, gadolinium, and terbium, along with several rare earth magnets. Although initially aimed at the US, the restrictions affect all of China's trading partners. The move has prompted EU governments, business chambers, and automakers to seek an urgent resolution. Šefcovic said the EU and China compared data on licence applications and approvals, but discrepancies were found. The EU will now share company-provided figures with Beijing in an effort to clarify the mismatch. Automotive sector fears repeat of chip crisis European carmakers are already feeling the effects. Mercedes-Benz is in talks with suppliers to secure short-term stocks, while BMW has reported supply disruptions, according to Bloomberg. The shortages are drawing comparisons to the global chip crisis during the Covid-19 pandemic, which disrupted production lines worldwide. Rare earths deepen EU-China trade rift The rare earth row adds to mounting EU-China trade tensions. This week, EU members voted to exclude Chinese firms from its medical procurement market, citing Beijing's refusal to reciprocate. The EU also plans to impose a €2 levy on small parcels from Chinese e-commerce platforms such as Temu and Shein, in an effort to curb the influx of cheap imports. Beijing has accused the bloc of discriminatory treatment. In response to supply concerns, the European Commission has announced 13 overseas projects to reduce dependence on Chinese rare earths. These include mining and processing ventures in Malawi, South Africa, Brazil, Canada, and New Caledonia. ALSO READ | Dialogue continues despite trade friction Despite rising tensions, both sides have pledged to maintain dialogue on rare earths. The EU imported 6,000 tonnes of rare earths from China in 2024, representing 46.3 per cent of its total rare earth imports. 'We want to find a pragmatic solution — fast,' Šefcovic said, emphasising the urgency of resolving the dispute.
Fibre2Fashion
03-05-2025
- Business
- Fibre2Fashion
India, EU reaffirm commitment to finalise FTA by 2025 end
Piyush Goyal, the Minister of Commerce and Industry of India, and Maroš Šefcovic, European Commissioner for Trade and Economic Security, recently engaged in a forward-looking and substantive dialogue to address global trade challenges and reaffirm their shared resolve to conclude the India-European Union Free Trade Agreement (FTA) by the end of 2025. This commitment builds on the strategic direction given by Prime Minister Narendra Modi and President of the European Commission, Ursula von der Leyen during the visit of the EU College of Commissioners to New Delhi in February 2025. India and the EU have reaffirmed their commitment to concluding the free trade agreement (FTA) by end-2025, aiming for a balanced, inclusive, and resilient trade partnership. India's Piyush Goyal and EU's MaroÅ¡ Å efÄoviÄ highlighted progress in negotiations and the importance of addressing non-tariff barriers. The FTA seeks to enhance market access, digital transition, and supply chain resilience. The high-level engagement underscores the strategic importance both partners attach to building a commercially meaningful, mutually beneficial, balanced, and a fair trade partnership that supports economic resilience and inclusive growth. The meeting highlighted the progress made across multiple negotiating tracks and emphasised the importance of maintaining the ongoing momentum through monthly negotiating rounds and continued virtual engagement. Both sides reiterated their aim to address pending issues in a spirit of mutual respect and pragmatism, including at the next round scheduled to be held from May 12-16, 2025, in New Delhi. India emphasised that meaningful progress in trade negotiations requires equal focus on non-tariff barriers (NTBs) alongside tariff discussions and regulatory frameworks must be inclusive, proportionate, and avoid restricting trade, the Ministry of Commerce and Industry said in a press release. The India-EU FTA aspires to reflect the evolving realities of global commerce by supporting digital transition, promoting diversified and resilient supply chains. Both sides expressed optimism that the agreement, once concluded, will serve as a transformative pillar of the broader India-EU strategic partnership, enhancing market access, supporting regulatory cooperation, and fostering innovation and competitiveness on both sides. Both sides acknowledged the crucial role of investment flows and people-to-people mobility in sustaining economic vitality. In the spirit of India's emergence as a 'Vishwa Mitra'—a partner to the world—and aligning with its 2047 development goals, the India- EU FTA is seen as an instrument to promote diversified production networks and uphold fair trade principles. As India continues to broaden its footprint through multiple free trade deals, this dialogue reflects its broader vision of shaping a future-ready framework aligned with national priorities and global aspirations. Fibre2Fashion News Desk (RR)
