EU urges G7 response to China’s rare-earth export curbs

HORSENS, Denmark — The European Union will not shy away from a strong response to China’s latest export restrictions on rare earths in coordination with its G7 partners, the EU trade chief said Tuesday. 

“This is seen as a critical concern,” Maroš Šefčovič said ahead of a meeting of EU trade ministers in Denmark, calling China’s move a “dramatic” expansion of raw materials targeted by the restrictions, which was “aggravating” an already serious situation. 

Šefčovič said he had discussed the situation with U.S. Commerce Secretary Howard Lutnick, and the two agreed “that it would be advisable after this first discussion also to have a G7 video call pretty soon.” The G7 groups the United States, Canada, Germany, France, Italy, the United Kingdom and Japan.

China last year imposed similar controls on materials like graphite, germanium and gallium, all of which are also used in tech, defense and green industries. Šefčovič complained that for those materials “only half of the applications” were properly processed by Beijing.

Beijing announced sweeping new export controls on rare-earth magnets and their raw materials last week on grounds of national security. The move requires magnet-makers to get approval from China if they use even trace amounts of Chinese rare earths. Beijing produces 90 percent of the world’s rare-earth magnets, which are used in electromotors, generators for wind turbines and defense applications.

This drew the ire of U.S. President Donald Trump who threatened to respond with fresh tariffs and hinted he would no longer meet with his Chinese counterpart Xi Jinping at the end of October. 

Although Washington is moving to deescalate the clash, Šefčovič didn’t completely shut the door to a similar response, telling reporters that he wanted to gather a first assessment from EU ministers. 

“For us, what is important is to protect the European general interest and to find a solution which would not be harmful to the European industry. So first we consult and assess the situation,” he added. 

The EU trade chief also said that he would request a videoconference with his Chinese counterpart “most probably in the next week.” 

Denmark’s Foreign Minister Lars Løkke Rasmussen said that the European Union should “have a tough response,” and that the bloc needs to “flex the muscles” as the biggest trading bloc in the world — but didn’t go as far as calling for similar tariffs. 

“This is actually an area where we have a common interest with our friends in the U.S.,” Rasmussen added. Denmark is currently helming the Council of the EU, the bloc’s intergovernmental branch. 

Camille Gijs reported from Horsens, Denmark and Koen Verhelst from Brussels.