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Reuters
18 hours ago
- Automotive
- Reuters
China's rare earth weapon changes contours of trade war battlefield
BEIJING, June 6 (Reuters) - China has signalled for more than 15 years that it was looking to weaponise areas of the global supply chain, a strategy modelled on longstanding American export controls Beijing views as aimed at stalling its rise. The scramble in recent weeks to secure export licences for rare earths, capped by Thursday's telephone call between U.S. and Chinese leaders Donald Trump and Xi Jinping, shows China has devised a better, more precisely targeted weapon for trade war. Industry executives and analysts say while China is showing signs of approving more exports of the key elements, it will not dismantle its new system. Modelled on the United States' own, Beijing's export licence system gives it unprecedented insight into supplier chokepoints in areas ranging from motors for electric vehicles to flight-control systems for guided missiles. "China originally took inspiration for these export control methods from the comprehensive U.S. sanctions regime," said Zhu Junwei, a scholar at the Grandview Institution, a Beijing-based think tank focused on international relations. "China has been trying to build its own export control systems since then, to be used as a last resort." After Thursday's call, Trump said both leaders had been "straightening out some of the points, having to do mostly with rare earth magnets and some other things". He did not say whether China committed to speeding up licences for exports of rare earth magnets, after Washington curbed exports of chip design software and jet engines to Beijing in response to its perceived slow-rolling on licences. China holds a near-monopoly on rare earth magnets, a crucial component in EV motors. In April it added some of the most sophisticated types to an export control list in its trade war with the United States, forcing all exporters to apply to Beijing for licences. That put a once-obscure department of China's commerce ministry, with a staff of about 60, in charge of a chokepoint for global manufacturing. The ministry did not immediately respond to Reuters' questions sent by fax. Several European auto suppliers shut down production lines this week after running out of supplies. While China's April curbs coincided with a broader package of retaliation against Washington's tariffs, the measures apply globally. "Beijing has a degree of plausible deniability – no one can prove China is doing this on purpose," said Noah Barkin, senior adviser at Rhodium Group, a China-focused U.S. thinktank. "But the rate of approvals is a pretty clear signal that China is sending a message, exerting pressure to prevent trade negotiations with the U.S. leading to additional technology control." China mines about 70% of the world's rare earths but has a virtual monopoly on refining and processing. Even if the pace of export approvals quickens as Trump suggested, the new system gives Beijing unprecedented glimpses of how companies in a supply chain deploy the rare earths it processes, European and U.S. executives have warned. Other governments are denied that insight because of the complexity of supply chain operations. For example, hundreds of Japanese suppliers are believed to need China to approve export licences for rare earth magnets in coming weeks to avert production disruptions, said a person who has lobbied on their behalf with Beijing. "It's sharpening China's scalpel," said a U.S.-based executive at a company seeking to piece together an alternative supply chain who sought anonymity. "It's not a way to oversee the export of magnets, but a way to gain influence and advantage over America." Fears that China could weaponise its global supply chain strength first emerged after its temporary ban of rare earth exports to Japan in 2010, following a territorial dispute. As early as 1992, former Chinese leader Deng Xiaoping was quoted as saying, "The Middle East has oil, China has rare earths." Beijing's landmark 2020 Export Control Law broadened curbs to cover any items affecting national security, from critical goods and materials to technology and data. China has since built its own sanctions power while pouring the equivalent of billions of dollars into developing workarounds in response to U.S. policies. In 2022, the United States put sweeping curbs on sales of advanced semiconductor chips and tools to China over concerns the technology could advance Beijing's military power. But the move failed to halt China's development of advanced chips and artificial intelligence, analysts have said. Beijing punched back a year later by introducing export licenses for gallium and germanium, and some graphite products. Exports to the United States of the two critical minerals, along with germanium, were banned last December. In February China restricted exports of five more metals key to the defence and clean energy industries. Analysts face a hard task in tracking the pace of China's approvals following the Trump-Xi call. "It's virtually impossible to know what percentage of requests for non-military end users get approved because the data is not public and companies don't want to publicly confirm either way," said Cory Combs, a critical minerals analyst with Trivium, a policy consultancy focused on China.
Reuters
5 days ago
- Automotive
- Reuters
Indian carmaker Maruti Suzuki says no immediate hit from China curbs on magnet exports
NEW DELHI, June 2 (Reuters) - Maruti Suzuki ( opens new tab, India's top carmaker, said on Monday there is no immediate impact on its car production from China's export curbs on rare earth magnets, a key component in electric and gasoline cars. Indian car and component manufacturers told Prime Minister Narendra Modi's officials last week that auto production could grind to a halt within days due to Chinese export restrictions on rare earth magnets, Reuters reported. The companies want the government to lobby Beijing to relax the curbs.
South China Morning Post
16-05-2025
- Business
- South China Morning Post
US-China deal no relief for firms as rare earth curbs keep supply chain severed
When Beijing and Washington announced a 90-day truce in their trade war earlier this week, most companies doing business on both sides of the Pacific let out a sigh of relief. Any reprieve from the triple-digit tariffs that threatened to throttle bilateral trade would be welcome news for the firms who rely on that trade to stay operational. Advertisement But without alterations to export controls on the critical minerals essential to the production of certain goods – the 'rare earth' elements over which Beijing enjoys a near-monopoly in terms of supply and refining capacity – the firms producing those goods in China fear their business will remain endangered. Those fears could be well-founded. China, the world's top producer of these crucial components for consumer electronics, electric cars and defence systems, has continued to crack down on smuggling and enhanced its oversight of supply chains despite this week's cool-down. One US company, which manufactures audio equipment for what it terms 'non-sensitive commercial applications', lodged its concerns in internal documents seen by the Post. 'Delays in export approvals would disrupt our production and adversely affect the production schedules of downstream vehicle manufacturers, including potential production stoppages,' the company said. Advertisement The firm sources magnets – which carry trace amounts of the controlled elements – from China for its plants in Europe and Latin America.
Globe and Mail
15-05-2025
- Automotive
- Globe and Mail
How this Canadian startup is removing the need for rare earths in EV motors
Most electric vehicles have motors that use permanent magnets made with rare earth elements. These magnets make EV motors quieter and more efficient and are what give the vehicles their instant acceleration. The 17 metals that make up the group of rare earth elements aren't really rare but are difficult to find in their pure form. But a significant number of these rare earths come from China and getting them out of the ground and processing them is damaging to the environment. Mining just one ton of rare earth elements produces up to 2,000 tons of toxic waste, according to a report in the Harvard International Review. It's an unsustainable practice that needs a solution as the demand for these elements continues to rise. China's dominance of the rare earth market is also an issue. China recently introduced export controls on seven rare earth metals to all countries, which threatens to drive up their cost. Some automakers such as Tesla, General Motors, Jaguar Land Rover and Nissan are trying to find alternatives to rare-earth powered motors to reduce their reliance on China. Enter Enedym, a Hamilton-based startup that's developing an electric motor with the same power and reduced noise level as the permanent magnet version, but without the use of rare earths. Enedym's switched reluctance motor (SRM) uses only electrical steel, copper and iron. 'We focused on solving the permanent magnet issue with cost and supply chain by inventing new families of electric motors that do not need permanent magnets,' says Enedym's chief executive officer Ali Emadi, a professor at McMaster University and one of the leading experts in electric powertrains. Enedym is partly owned by McMaster University and is based at the McMaster Automotive Resource Centre, which hosts one of the largest academic automotive programs in North America. Electric motors consist of a stationary housing called a stator and an element that rotates inside it called a rotor. The stator contains loops of copper or aluminum windings that create a rotating magnetic field (RMF) when current is applied to it. This RMF induces a current in the rotor, causing it to spin and generate torque output. Permanent magnet motors use magnets mounted on or embedded within the rotor to generate a magnetic field without a current being applied, increasing their efficiency. The windings in the stator of a SRM are connected to the power electronics drive with solid-state switches. Each winding on the stator is switched on and off sequentially, forcing the rotor to align with the nearest energized stator pole, generating torque and causing it to spin without needing permanent magnets. Emadi says that a SRM is one of the simplest and least expensive motor designs. It has also been around for a long time but is noisy and has lower torque and power density, making it uncompetitive with permanent magnet motors. 'We've solved all of this,' Emadi says. 'Our motors are very simple, but the software and control for them is amazingly complex.' Motor technology is only half of the company's focus. Enedym's strength is its digitization software platform, which allows it to rapidly design and prototype new motors. 'It's a multiphysics, multidomain, [artificial-intelligence-enabled] software tool that we did over 10 years at McMaster University,' says Emadi. The software allows engineers to design, optimize and test a new motor design in a couple of weeks. Other companies can take more than nine months to do it using traditional methods. Designing electric motors is a complex task that requires teams of engineers from varying disciplines such as electromagnetic, thermal, electronic and mechanical. Emadi says it's time-consuming and expensive and the process isn't efficient because each team works sequentially. 'It's a bottleneck for companies that don't do many designs. They do one design once in a while and then manufacture the heck out of it,' says Emadi. 'We give the engineers better tools to design, develop and optimize much faster.' This speed gives Enedym the ability to tackle multiple industries at once and the company has more than 80 patents and patents pending for its technology and software. In one prototype, the company replaced the permanent magnet motor in a Cadillac Lyriq EV with one of its designs. It was part of a GM-sponsored student competition called EcoCAR, which pits 15 universities across North America against each other in a four-year challenge to design the next generation of electric vehicles and mobility solutions. Enedym also has a contract with a major manufacturer they can't disclose to build motors for electric scooters and motorcycles slated for the Asian market. It also has a collaboration with Toyota Tushu on electric luggage tow tractors, with prototypes in operation at Hamilton Airport. Enedym is also working on the next generation of wind-pitch motors that adjust the pitch angle of the blades on wind turbines. Enedym is also involved in the new rapid prototyping facility at the Innovation Centre called FARM (Facility for Advanced Rapid Manufacturing), where it designs and builds motors, power electronics, controllers and software. Where some companies can spend a year developing one motor design and mass producing it, FARM can output 25 or more different designs for many different industries and applications over six months. This manufacturing flexibility allows Enedym to pivot to different domains quickly, which Emadi says is important in the current political climate, especially when tariffs seriously threaten the auto industry. 'Development is expensive, design is expensive, but you cannot tariff these things,' says Emadi, referring to the software, design and development.
