The worldwide concern about supply chain disruptions is rising because China’s export restrictions on critical minerals and rare earth magnets are causing problems for production lines in major industries. The German and Indian automobile sectors have joined other international companies to ask China for expedited export license approvals because they fear production shutdowns will become unavoidable.
The April decision by China to stop exporting rare earth alloys and magnets and other minerals demonstrated its control over the sector while using this power to negotiate with President Donald Trump during their trade disputes. The White House announced that Trump will meet with Chinese President Xi Jinping this week to discuss the matter.
White House spokeswoman Karoline Leavitt stated that the administration tracks Geneva trade agreement compliance while pushing Beijing to speed up export license processing. The delay in license approvals creates concerns among industry leaders that it will disrupt the manufacturing of electric vehicles together with defense equipment and consumer electronics.
German auto and aerospace industries face production delays and possible shutdowns because of the current export restrictions according to Hildegard Mueller who leads Germany’s auto lobby. The Chinese ports have stopped all shipments because export license applications remain trapped in regulatory delays.
The U.S. and its allies need to prioritize domestic production of critical materials because China’s export control has become an immediate concern according to former U.S. energy diplomat Frank Fannon. According to him the solution needed to be implemented immediately.
The diplomatic efforts of European and Asian corporate leaders and diplomats aim to persuade Beijing to provide essential supplies because the world faces a potential manufacturing disruption that will last through the summer months.
