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4d ago

China’s Rare Earth Export Controls Halt Auto Production Worldwide

Supply shortages derailing assembly lines across major markets have led automakers along with parts suppliers to demand immediate government intervention.

Workers transport soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China October 31, 2010. REUTERS/Stringer/File Photo ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. CHINA OUT.
A labourer works at a site of a rare earth metals mine at Nancheng county, Jiangxi province March 14, 2012. REUTERS/Stringer/File Photo
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A Chinese flag flutters at the Chinese Ministry of Commerce building in Beijing, China June 4, 2025. REUTERS/Florence Lo/File Photo

Overview

  • China’s Ministry of Commerce introduced export licensing requirements in April for seven rare earth elements and magnets, halving shipments and creating a backlog that slowed global exports.
  • Shortages of rare earth magnets forced Ford to pause Explorer SUV production in Chicago, prompted Suzuki to suspend Swift assembly and idled several European auto supplier plants this month.
  • The U.S. Vehicle Suppliers Association and Europe’s CLEPA have warned of serious, real-time risks to automotive supply chains, calling for immediate relief from Beijing.
  • Automakers including BMW and Mercedes-Benz are exploring stockpiling strategies, alternative materials and domestic processing projects to reduce dependence on China’s rare earth supply chain.
  • Beijing’s curbs are widely viewed as retaliation for President Trump’s tariffs, underscoring China’s leverage in the trade war over critical minerals.