EU warns China of export controls less often

EU warns China of export controls less often

The European Union has asked China to loosen the restrictions on rare earths - materials that are decisive for everything from cars to washing machines. The export controls Beijings disrupted the supply chains and triggered production problems in various industries in Europe and America.

urgency of the topic

Maros Sefcovic, trade commissioner of the European Union, said that this concern had this concern with the Chinese Minister of Commerce Wang Wentao on Tuesday during the conference of the Organization for Economic Cooperation and Development in Paris “Supreme Priority”. "I have informed my Chinese counterpart about the worrying Situation in the European automotive industry, but I would say that this affects all industries, because rare earths and permanent magnets are of absolute importance for industrial production," Sefcovic told journalists on Wednesday.

China's dominance in the supply chain

in April, during a trade dispute with America, China used his global dominance with rare earth Export controls for seven species of rare minerals and several magnets. These are required for everything from everyday electronics and vehicles to high-priced weapons such as the F-35 fight jet. China controls 90 % of the global processing of rare earths.

effects on industry

Despite a 90-day Head of Heading Beijing has so far failed to loosen these can growing resentment in Washington. Last week there was a skirmish between China and the USA about the violation of the temporary trade agreement, which was achieved in Geneva. In the meantime, automobile manufacturers warn that factory closures are imminent because they find it almost impossible to import rare earth magnets from China.

concern about production interruptions

"When it comes to the permanent magnets that are clearly used for civil production, since they are needed for washing machines, cars and other household appliances, this has enormous effects on industry," said Sefcovic. On Wednesday, a European automotive association also expressed concern about the “significant disorder” in the European automotive supply chain due to the restrictions in China in rare earths.

new export controls and their challenges

According to the new controls, exporters of rare earths and magnets must apply for a license for each delivery and provide supportive documents to check the intended end of these materials. Since April, the Chinese authorities have only approved about a quarter of the hundreds of license applications. In addition, the application process is opaque and inconsistent between the provinces, with some licenses rejected for procedural reasons and others required the disclosure of sensitive information, including intellectual property.

international reactions

The German automobile manufacturer Volkswagen previously CNN Number of export licenses ”was granted. China's customs authorities showed that the deliveries of rare earth magnets to Germany from March to April, the month in which the restrictions came into force to go back to half.

frustration in the USA

In the United States, the officials also grow frustration over the slow approval practice for the exports of rare earths. The government of US President Donald Trump believed that China would remove the export restrictions for rare earth as part of the trade rest, and has accused Beijing of violating the agreement agreed in Geneva. Some Chinese providers have received approval to export rare earth to several American automobile manufacturers - however, it is unclear whether these companies are actually in the USA.

challenges in export

A long -time dealer for rare earths in the United States reported that his company was still waiting for the approval of shipping queries that were submitted by his Chinese suppliers seven weeks ago. One of the application documents asked for a photo of the production facility of the end user. "I don't know anyone who would be willing to do that," added the dealer.

price increase and delayed deliveries

The export restrictions have undoubtedly forced manufacturers to search for the now limited materials for stocks, and prices rise rapidly. "Everyone who has inventory of it sells at prices that are four to seven times higher than those who could have been offered on the market two months ago," said the dealer. In some cases, for example in the YTTRIUM soft metal, customers are willing to pay more than ten times the price.

The presence of export controls also influenced the exchange of materials that are not on the list. "We are experiencing slower deliveries. The Chinese customs authorities check exports more intensively than ever," said the source. In fact, the deliveries of rare earth magnets to the United States fell by 60 %from March to April.

The spokesman for the Chinese Ministry of Foreign Affairs, Lin Jian, said on Thursday that the country's export controls "in accordance with common international practices, were not discriminatory and not geared towards certain countries".

The reporting of CNNS Fred He contributed to this article.