As the global industry waits in suspense, China has begun issuing export licenses for rare earth elements, but the pace is so slow that it may soon disrupt global production lines. The delay comes at a time of renewed tensions between the U.S. and China.
š¦ Licenses Are ComingāBut Not Fast Enough
Beijing recently imposed new export controls on seven key rare earth elements and related permanent magnets, which are essential for electric vehicles, wind turbines, robotics, and military technology. Now, every shipment needs a license from the Chinese Ministry of Commerce before it can leave the country.
But exporters and trade groups warn that licenses are being approved too slowly. Some shipmentsālike those headed to Germanyāhave been cleared, but the overall volume falls far short of global demand.
āThe window to avoid serious damage to European manufacturing is closing quickly,ā warned Wolfgang Niedermark of the Federation of German Industries (BDI).
Executives from Tesla, Ford, and Lockheed Martin have also raised alarms, warning investors that the new restrictions could delay or even halt supply chains.
ā ļø Strategic Retaliation or Bureaucratic Bottleneck?
The tightened rules came shortly after President Trump imposed new tariffs on Chinese goods on April 2. Many analysts view Chinaās export restrictions as a direct strategic response, leveraging its dominance in rare earth minerals.
Itās still unclear whether any licenses have been issued to the U.S. since the countries agreed to a 90-day tariff truce earlier this month. Chinese firm Yantai Zhenghai Magnetic Material confirmed that it had resumed accepting ordersābut only from select buyers.
Insiders say some cargoes may be leaving even before official approvals are finalized, adding further uncertainty. According to Cory Combs of Trivium China, there's no evidence of a full export freezeābut the ambiguity itself serves as a tool of pressure.
š§² Companies Warn: Delays Could Paralyze Production
Executives say bureaucratic bottlenecks are real, and that some foreign firms are unsure how to prove their products wonāt be re-exported to the U.S., a violation under the current rules.
Tesla, for example, was asked to guarantee that magnets used in its robotic arms wouldnāt end up in military applications. Elon Musk admitted the discussions were difficult but said heās confident the issues can be resolved.
At Lockheed Martin, officials said they have enough materials to last through the year, but warned that longer delays could impact F-35 production.
š The West Races to Diversify, but Time Is Short
Analysts believe the new restrictions will reshape global supply chains for years to come. Western firms will likely accelerate efforts to find alternative sources, but in the short term, they remain dependent on what China allows to leave.
Until clear rules and timelines emerge, uncertainty will continue to weigh on global markets. And if Beijing uses license delays as a deliberate pressure tactic, it could spark another round in the ongoing trade conflictāthis time at the heart of high-tech manufacturing.
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