China: Suspension of export controls for rare earths also applies to the EU

Following intensive discussions with the Chinese leadership, the EU has received assurances that the export restrictions on rare earths, which were suspended by Beijing after a meeting between Chinese President Xi Jinping and US President Donald Trump, will also apply to the European Union. China has postponed the recent export controls for the critical minerals, which are essential for the global semiconductor, clean-tech, and defense industries, for one year after the meeting with Trump in South Korea.

This breathing room, which Beijing is now officially extending to the EU, gives the European economy a crucial deadline to secure its supply chains. EU Trade Commissioner Maroš Šefčovič confirmed on Saturday after talks with Chinese Minister of Commerce Wang Wentao that China has suspended the application of the export hurdles for the EU, which were tightened in October. Both sides reaffirmed their commitment to continue dialogue on better implementation of export control guidelines.

The significance of this step for the EU is considerable, as the bloc is dependent on China for approximately 99 percent of its rare earth supply. A Commission spokesperson welcomed the temporary pause of the restrictions, which China has long used to expand its influence on the global market and pursue geopolitical goals, as an “appropriate and responsible step.” This contributes to stabilizing global trade in a critical area.

Von der Leyen wants to counter

For the EU, Beijing's concession is considered a provisional success in its ongoing efforts to reduce strategic dependence on China and increase the resilience of its critical raw material supply chains. However, the current commitment once again highlights how much European supply security is influenced by the decisions of third powers. Critics complain that the EU continues to work at the behest of the Americans to tighten its export controls against China, while at the same time demanding the lifting of Beijing's restrictions, which borders on hypocrisy.

The EU Parliament complained in July that China is deliberately using export barriers for rare earths as a weapon. MEPs urged to accelerate the implementation of the EU regulation on critical raw materials. This regulation aims to ensure that the community has secure, diversified, and sustainable access to raw materials.

EU Commission President Ursula von der Leyen (CDU) announced last week that she intends to use “all the instruments at our disposal” to break China's trade blockade on critical raw materials. The Brussels-based governing institution is working on the plan “RESourceEU”, to secure “short-, medium-, and long-term access to alternative sources” for European industry, especially for rare earths. This starts with the circular economy, i.e., the use of critical raw materials from products already in circulation. Partnerships in this area with countries such as Ukraine, Australia, Canada, Kazakhstan, Uzbekistan, Chile, and Greenland are also crucial.

(nen)