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China’s move to impose strict export controls on rare earth elements used in auto manufacturing has reportedly sparked fears of potential shortages of cars.
Earlier this month, Chinese President Xi Jinping’s regime enacted limits on shipments of seven rare earth metals and magnets that are essential to building electric vehicles – as well as military hardware like fighter jets and drones, electronics and other key products.
The move has left many Western firms with stockpiles of key materials that will last six months or less, the Financial Times reported, citing interviews with government officials, auto executives and metals traders.
“If we don’t see magnet deliveries to the EU or Japan in that time or at least close to that, then I think we will see genuine problems in the automotive supply chain,” Jan Giese, a trader at Frankfurt-based firm Tradium, told the outlet.
Elsewhere, a senior auto executive who requested anonymity told the FT that the restrictions would be “consequential” for car manufacturers, including Elon Musk’s Tesla.
China’s export controls – the latest in a series imposed by Beijing – were retaliation against President Trump’s to impose total tariffs of 145% on imports of Chinese goods. China had already banned exports of gallium, germanium and antimony and restrictions on shipments of graphite.
The latest export controls require rare earth firms in China to secure licenses from the Chinese Communist Party in order to ship the materials internationally.
Last week, Reuters reported that Tesla had halted imports of certain car parts needed to ramp up planned production of its upcoming Cybercab and Semi electric truck due to the trade war.
As The Post has reported, China’s near-total control of the supply chain of rare earth metals and other critical minerals has prompted national security concerns, given the strained relations between Washington and Beijing.
China mines up to 70% of the world’s supply of critical minerals and controls 90% of the processing capacity. Critics have also accused Beijing of using unfair trade tactics – including price manipulation and export limits – to press their advantage.
Experts have also warned that China could cut off shipments entirely in the event of worsened diplomatic relations or an actual conflict.
Both the Trump administration and Congress have been scrambling to address the budding crisis.
Last year, Rep. Rob Wittman (R-Va.), who leads the House Select Committee on China’s Critical Minerals Policy Working Group, introduced a trio of bills aimed at boosting the US critical mineral supply chain and limiting dependence on China.
“We are not going to combat them in any other way other than having an alternative to what China does. And I think we can do that, and I think we can do that quickly,” Wittman told The Post in January.
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