German industrial federation urges swift EU action on rare earth exports
The German industry federation, the Bundesverband der Deutschen Industrie (BDI), has written to the Federal Minister of Economics, Katherina Reiche, expressing concerns over the severe restrictions on the export of rare earths from China. The BDI has presented a list of proposals to address the issue, including a simplified and accelerated licensing procedure for exports to the EU. The industry body emphasizes the need for short-term planning certainty, as several German companies have already reported production disruptions, with some on the verge of halting production.
China is using the restricted access to critical raw materials as a negotiating tool in talks with the EU. In exchange for a relaxation of the export restrictions on rare earths and the production of related products, the EU is expected to make concessions. The EU’s export restrictions on technology, particularly for the production of high-tech chips by the Dutch market leader ASML, as well as EU tariffs on Chinese electric cars and the currently suspended Comprehensive Agreement on Investment (CAI), are among the issues at stake.
China had significantly curtailed the export of rare earths and related products in the context of the trade dispute with the US. Although the US and China had reportedly agreed earlier in the week to have China supply magnets and “all necessary rare earths” the expected improvements have not materialized for European companies, as feared by economic representatives.