A high-stakes call between US and Chinese presidents has yet to resolve a global shortage of rare earth exports that could halt production of cars and other industrial parts this summer. The shortage is caused by China’s gradual restriction on international sales, which includes new export controls on seven rare earth elements announced in early April.
China had expected to repeal the restrictions as part of its trade agreement with the US, but only some Chinese suppliers have received six-month export licenses for rare earths. This has left 75% of affected companies saying their existing supplies would run out within three months.
The impact extends beyond US companies, with several European auto parts companies already having to stop production and warning of widespread disruptions in coming weeks. China has approved only about 25% of “hundreds of export license applications” that were submitted.
The shortage is caused by the increasing use of rare earths in high-tech products such as semiconductors and industrial cutting machines. The lack of supplies could affect Western companies, including Suzuki Motor, which briefly suspended production of its Swift car due to China’s restrictions.
China has defended its export controls as consistent with universal practices, but experts say that the measures are having a severe impact on global supply chains.
Source: https://www.cnbc.com/2025/06/06/trump-xi-call-isnt-enough-to-resolve-critical-mineral-shortage.html