China’s move to impose strict export controls on rare earth elements used in automobile manufacturing reportedly sparked fears about potential shortages in automobiles.
Earlier this month, China’s Xi Jinping government enacted restrictions on the shipment of seven rare earth metals and magnets, essential to the construction of electric vehicles.
This move has left many Western companies stockpiled important material for less than six months, Financial Times reportedcites interviews with government officials, automotive executives and metal traders.
“If we don’t see magnet delivery to the EU or Japan at the time, or at least that close, then, we’ll see a real problem with the automotive supply chain,” Jan Guys, a trader at the Frankfurt-based company, told the outlet.
Elsewhere, senior automotive executives who requested anonymity told FT that restrictions would be “consequential” for automakers, including Elon Musk’s Tesla.
China’s export controls – the latest in the series imposed by Beijing – was retaliation against President Trump, imposing a 145% gross tariff on Chinese goods imports. China had already banned the export of gallium, germanium and antimony, and had restricted restrictions on the shipping of graphite.
The latest export restrictions require Chinese rare earth companies to secure licenses from the Chinese Communist Party to ship the materials internationally.
Last week, Reuters reported that Tesla had halted imports of certain auto parts needed to increase planned production of future cybercabs and semi-electric trucks due to the trade war.
As the Post reported, given the tense relationship between Washington and Beijing, nearly narrow control of China’s rare earth metals and other important mineral supply chains has sparked national security concerns.
China mines up to 70% of the world’s important mineral supply and controls 90% of its throughput. Critics also accused Beijing of using unfair trade tactics, including price manipulation and export restrictions, to impose their advantages.
Experts also warn that China can completely block cargo if diplomatic relations and actual conflicts worsen.
Both the Trump administration and Congress are rushing to deal with the budding crisis.
Last year, Rep. Rob Whittman (R-Va.), who heads the House Selection Committee on China’s Key Mineral Policy Working Group, introduced a trio of bills aimed at boosting the US’s key mineral supply chain and limiting its dependence on China.
“We’re not going to fight them any other way than we have an alternative to what China is doing, and I think we can do that.
