European companies are halting production due to shortages of rare earth products from China, even as the world’s top supplier ramps up overall exports to record levels.
Companies in the European Union incurred seven production stoppages in August because of the shortfalls, and an additional 46 are expected this month, the EU Chamber of Commerce in China said Thursday, without specifying the scale or nature of the affected facilities.
“We are seeing things moving, but they are moving extremely, extremely slowly,” Carlo D’Andrea, the chamber’s vice president, said at a press briefing in Shanghai. He called the supply bottleneck the single biggest issue currently facing the group’s members.
The crisis highlights the collateral damage from the US-China trade war despite a recent reprieve, with a Friday call between President Donald Trump and Chinese leader Xi Jinping expected to cool tensions in a conflict that has seen both sides use key exports as leverage.
Rare earth flows from China collapsed from early April this year after Beijing put export controls on some of them. The restrictions particularly threatened the supply of rare earth magnets, a market where China controls 90% of global output, disrupting major industries from electric vehicles to wind turbines.
While a subsequent truce between Beijing and Washington has seen total Chinese rare earth shipments surge last month to the highest of any month since at least 2012, European firms say they are being left behind. The chamber’s warning contrasts with remarks earlier this week from US Trade Representative Jamieson Greer, who said supplies to his country had “bounced back up significantly.”
D’Andrea said European companies are concerned with uneven implementation, noting that some companies appear to get export certificates in two days, while others wait two months or more.
“I know US companies can get this license very very fast,” he said. “There is a bottleneck that MOFCOM can easily fix.”
The Ministry of Commerce, which is in charge of approving export licenses, didn’t respond to a request for comment.
The information on potential shutdowns in Europe comes from 22 firms that have sought the EU Chamber’s help in getting approval for a total of 141 urgent applications for exports from China.
Overseas shipments of rare earth products, including high-performance magnets used in everything from consumer goods to fighter planes, rose to 7,338 tons last month, according to Bloomberg calculations based on government data.
A geographic breakdown of those August exports is scheduled for release by China’s customs authority on Saturday.
“China’s imposition of export controls on rare earths in April 2025 exemplifies how the US-China trade war can have significant spillover effects on global trade, critically impacting European companies’ supply chains,” the EU Chamber said in a report earlier this week.
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