Beijing and Brussels agree on new export mechanism — details and impact remain unclear.
According to media reports, the European Union and China have taken a step toward resolving their dispute over rare earth exports. Global supply of these critical raw materials has been under pressure since China, the world’s dominant producer, introduced new export controls and a licensing system for certain rare earth elements in April. In May, for example, exports of dysprosium and terbium dropped to zero.
Now, both sides have reportedly agreed on an “improved mechanism” aimed at increasing transparency in the licensing process and avoiding further supply disruptions. “We have agreed on a better mechanism for export transparency,” European Commission President Ursula von der Leyen said Thursday following the EU-China summit in Beijing. However, she offered no further details—leaving unanswered which exports will be affected or whether China will receive any concessions in return.
Von der Leyen added that the EU is pushing for a broader realignment of its trade relationship with China, emphasizing the principles of fair competition and free trade. In addition to better market access for European companies, she highlighted concerns over Beijing’s subsidies and the resulting industrial overcapacities.
Industry Cautiously Optimistic, but Challenges Remain
Jan Giese, Senior Manager for Minor Metals and Rare Earths at TRADIUM GmbH, one of Europe’s largest raw material traders, described the announcement as another encouraging political signal. However, he noted that it remains to be seen whether this will result in any concrete easing of export volumes in the coming weeks. Giese also cautioned against easing efforts to diversify supply chains, citing the rapidly shifting and uncertain geopolitical environment of today.
Earlier this month, the United States and China also signaled progress in separate discussions regarding the trade of rare earth elements. Yet here, too, the long-term effects remain unclear. While China resumed some shipments of rare earth magnets to the U.S. in June, it continued to withhold exports of the strategically important metals dysprosium and terbium.
Photo: iStock/Vera Tikhonova