Some Good News for US Auto Makers: Temporary Export of Rare Earths from China
US exports of rare earth elements to automobile manufacturers in the United States are granted certain licenses
In a surprising turn of events, China has reportedly granted temporary export licenses for rare earth metals to major US automakers. Sources familiar with the matter have revealed that suppliers for General Motors, Ford, and Stellantis were among the lucky handful to receive approval for exporting some rare earths on Monday.
Both GM and Ford have remained tight-lipped about the development, while Stellantis acknowledged their efforts to ensure a smooth licensing process with their suppliers. So far, the auto giant has managed to steer clear of significant production disruptions. China's Ministry of Commerce, however, did not return a request for comment.
This seemingly favorable move follows months of turmoil in the automotive industry since China imposed export controls on seven key metals in April, arguing that it's for national security reasons and combating illegal resource trading in the backdrop of the US trade dispute.
The subsequent application process for export permits has proven to be painstakingly slow, leading to potential supply issues down the line. According to the European industry association CLEPA, hundreds of export license applications submitted since early April have only seen a quarter get approved, with others receiving denials.
The sluggish process has caused alarm waves across industries, including Germany, Europe, Japan, and the US, as rare earths are crucial components for motors, sensors, and other essential vehicle parts. Firms like Suzuki have already felt the heat, with the Swift's production coming to a halt, while European suppliers have had to halt production lines. Other industries, such as aircraft, defense, and medical technology, are also not immune to the rare earth shortage.
China dominates the global market for rare earth metals, boasting more than 90 percent of the world's processing capacities for magnets, which are indispensable for electric vehicle motors and various household appliances. As the trade conflict continues to unravel, it's anyone's guess what the next phase will bring for these key players.
[1] Source: ntv.de, chr/rts
- Rare Earths
- China
- Tariffs
- Auto Manufacturers
- Trade Conflict
- The temporary export licenses for rare earth metals granted by China to major US automakers, such as General Motors, Ford, and Stellantis, could potentially alleviate the supply issues faced by small and medium-sized undertakings (SMes) in the automotive industry, including those involved in producing motors, sensors, and other essential vehicle parts.
- The application process for export permits for rare earth metals in China has been slow and tedious, causing concern among various industries, including sports technology, defense, medical technology, and small and medium-sized undertakings (SMes) that rely heavily on these resources for manufacturing crucial components.
