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China has been tightening its global exports of rare earth magnets and rare earth elements since April in retaliation for high tariffs imposed by the United States. Exports of these two materials are restricted because they have secondary uses for military purposes. But the worst affected at this time are the automotive industries in the United States and Europe.
According to a statement issued by the European Automotive Suppliers Association (CLEPA), production of vehicles and components in Europe has already begun to be halted in Europe. Vehicle production in the United States is expected to cease in just a few weeks. China requires a special license before rare earth magnets and rare earth elements can be exported. But China has only approved 25% of export license applications so far, creating issues in the supply chain.
In addition to the automotive industry, the robotics industry and electric vehicle battery production have also been affected. China is using its 90% dominance of rare earth element production to put pressure on the United States. CLEPA has urged the United States and China to hold urgent negotiations before the American and European automotive industries are completely paralyzed in the near future.