Europe Alarmed by China's Rare Earth Export Clampdown

European automakers and high-tech manufacturers are warning of significant supply disruptions after China expanded export restrictions on rare earths and related processing technologies.

Beijing's Commerce Ministry framed the measures as a safeguard against military diversion of critical materials. Officials also signaled readiness for a trade conflict, reducing incentives for quick rollback.

China supplies about 60% of rare earth minerals and controls roughly 90% of global refining capacity, creating a tight bottleneck for permanent magnets, battery components, and specialized alloys used in electric vehicles, semiconductors, and renewables.

Industry groups in Germany and Italy report that emergency stockpiles accumulated during earlier restrictions are nearly exhausted. The VDA cautioned the new rules will have far reaching effects on deliveries across Europe, and sector analysts say some specific elements could face acute shortages sooner than others.

Firms still hold inventories at strategic storage sites, which may avert immediate breakdowns, but logistics and processing constraints could squeeze supplies within months if diplomatic talks stall. Trade associations are urging urgent government intervention in Brussels and Berlin to negotiate access or diversify sourcing and ramp up domestic processing capacity.

Outcomes will hinge on international negotiations and whether alternative refining capacity can be developed quickly.