China's decision in April to suspend exports of rare earths and related magnets is severely impacting global supply chains, particularly the auto industry. European auto parts plants have suspended output, and companies like Mercedes-Benz and BMW are exploring ways to mitigate shortages. China, which produces 90% of the world's rare earths, is using this dominance as leverage in its trade war with the U.S. Many companies are struggling to obtain export licenses, and concerns are growing that this could lead to a shortage similar to the computer-chip crisis during COVID-19. EU officials are seeking clarification from China and emphasizing the need to diversify dependencies.
Auto industry hit by China’s rare earth export curbs as worldwide concerns grow
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TL;DR: Key points with love ❤️China's decision in April to suspend exports of rare earths and related magnets is severely impacting global supply chains, particularly the auto industry. European auto parts plants have suspended output, and companies like Mercedes-Benz and BMW are exploring ways to mitigate shortages. China, which produces 90% of the world's rare earths, is using this dominance as leverage in its trade war with the U.S. Many companies are struggling to obtain export licenses, and concerns are growing that this could lead to a shortage similar to the computer-chip crisis during COVID-19. EU officials are seeking clarification from China and emphasizing the need to diversify dependencies.
Trending- 1 April: China suspends exports of rare earths and related magnets
- 2 Early April: Hundreds of requests for export licenses made by auto suppliers
- 3 Last week: Indian EV maker complains about restrictions
- 4 Tuesday: ZF Friedrichshafen board member discusses situation
- 5 Wednesday: Ford, EU, Mercedes-Benz officials comment; Trump posts on social media; Trump and Xi Jinping expected to talk
- Suspension of output at some European auto parts plants
- Increased stress on highly organized supply chains
- Companies exploring building 'buffers' like stockpiles
- Disruption of supplier networks for some automakers
- Lobbying of governments for solutions
- Increased will to diversify critical mineral supplies outside China
- Concerns about a potential shortage similar to the computer-chip crisis
What: China's export restrictions on rare earths and related magnets are causing significant disruptions in the global auto industry supply chain, leading to production suspensions and concerns about future shortages.
When: April (China's decision to suspend exports), Wednesday (Ford's finance chief comments, EU trade commissioner comments, Mercedes-Benz production chief comments, Trump's social media post), last week (Indian EV maker grievance), Tuesday (ZF Friedrichshafen board member comments).
Where: China (imposing curbs), Europe (affected auto plants), United States (trade war context), Germany (affected automakers/suppliers), India (affected EV maker), Sweden (Autoliv).
Why: China is leveraging its dominance in critical mineral production (90% of rare earths) as a strategic tool in its trade war with the U.S. and in response to Washington's tariffs.
How: China implemented export controls on a wide range of rare earths and related magnets. This has led to a slow pace of granting export licenses, causing supply chain disruptions and production halts for companies dependent on these materials.