GLOBAL automakers are sounding alarms over China’s export restrictions on critical minerals, warning of potential production shutdowns as supply chain disruptions spread worldwide.
“If the situation is not changed quickly, production delays and even production outages can no longer be ruled out,” Hildegard Mueller, head of Germany’s auto lobby, told Reuters on Tuesday.
China’s decision in April to suspend exports of rare earth alloys, mixtures and magnets has upended supply chains for automakers, aerospace manufacturers, semiconductor companies and military contractors globally. The move underscores China’s dominance in critical minerals and appears to be leverage in its ongoing trade war with President Donald Trump, the newswire said.
German automakers became the latest to warn that the restrictions threaten production shutdowns, following similar complaints from Indian electric vehicle makers last week. Shipments of magnets essential for assembling cars, drones, robots and missiles have been halted at Chinese ports while license applications work through regulatory approval.
“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,” the Alliance for Automotive Innovation wrote to the Trump administration in May.
Frank Fannon, a minerals industry consultant and former assistant secretary of state, said the disruptions shouldn’t surprise those paying attention.
“We have a production challenge and we need to leverage our whole of government approach to secure resources and ramp up domestic capability as soon as possible. The time horizon to do this was yesterday,” Fannon said.
Trump and Chinese President Xi Jinping are expected to discuss the export ban this week, according to White House spokeswoman Karoline Leavitt.
