A group representing auto suppliers in the United States has called for immediate action to address China's restricted exports of rare earths, minerals and magnets, warning the issue could quickly disrupt auto parts production.
China, which controls over 90 percent of global processing capacity for rare earths used in everything from automobiles and fighter jets to home appliances, imposed restrictions in early April requiring exporters to obtain licences from Beijing. The tighter controls followed the opening of a trade war between the US and China after President Donald Trump imposed tariffs on Chinese imports.
In a statement to Reuters, MEMA, the Vehicle Suppliers Association, said parts companies are facing "serious, real-time risks" to their supply chains.
"The situation remains unresolved and the level of concern remains very high," the group said. "Immediate and decisive action is needed to prevent widespread disruption and economic fallout across the vehicle supplier sector."
On 9 May, the supplier group raised urgent concerns about the Chinese restrictions in a joint letter with the trade group representing General Motors, Toyota, Volkswagen, Hyundai and other major automakers.
"Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras," MEMA and the Alliance for Automotive Innovation wrote to the Trump administration in the letter, which was first reported by Reuters.
Rare-earth magnet exports from China halved in April as companies grappled with an opaque application process for permits that sometimes require hundreds of pages of documents.
In a social media post last Friday, Trump accused China of violating terms of a deal reached in May to temporarily dial back the tariffs both sides imposed on each other and other trade restrictions.
US auto companies are already feeling the impact of the restrictions. Ford shut down production of its Explorer SUV at its Chicago plant for a week in May because of a rare-earth shortage, the company said.
However, in response to the smear campaign by some people in the US against China's rare earth export controls, a spokesperson for the Chinese Ministry of Foreign Affairs said that the measures are in line with international norms.
“China’s export control measures are consistent with universal practices. Such measures are non-discriminatory and not targeted at any particular country,” the spokesperson said, adding that China remains open to dialogue and cooperation to help maintain global supply chain stability.
The spokesperson also criticised Washington’s approach, saying, “What the US does overstretches the concept of national security, politicises and weaponises trade and tech issues, and constitutes malicious attempts to block and suppress China. We firmly oppose that and will resolutely defend our legitimate rights and interests.”
