Slow Rare Earth Export Approvals Trigger Wave of Production Halts in European Companies

While China's exports of deep-processed rare earth products hit a single-month high in August since 2012, European companies are facing production halts due to supply shortages originating from China.

On the 18th, the European Union Chamber of Commerce in China reported that European supply chains are being affected by the U.S.-China trade war, with inconsistent speeds in China’s export license approvals raising concerns that American firms may be receiving preferential treatment. Due to shortages of rare earth materials, European companies experienced seven production disruptions in August, with 46 additional halts anticipated in September.

According to a report by Singapore’s Lianhe Zaobao, China holds an overwhelmingly dominant position in the global rare earth market, accounting for nearly 70% of global mining production in 2024. In particular, China controls 90% of the global production of rare earth magnets, which are critical for industries such as electric vehicles and wind turbines. In April 2025, China imposed export controls on certain rare earth products, leading to a sharp decline in supply and significantly disrupting global industrial chains.

Although China’s exports of deep-processed rare earth products—including high-performance magnets used in products ranging from consumer goods to fighter aircraft—surged to 7,338 metric tons in August, a development viewed positively by the market following a call between the Chinese and U.S. heads of state, European companies say they have not benefited.

Carlo D’Andrea, Vice President of the European Union Chamber of Commerce in China, stated at a press conference in Shanghai, “We see movement, but it is extremely slow.” He described the supply bottleneck as the “number one challenge” currently facing the chamber’s members. European companies are concerned about inconsistent approval times for rare earth export licenses, with some firms reportedly obtaining permits in as little as two days, while others wait two months or longer.

D’Andrea noted, “I know that U.S. companies are getting their licenses very quickly,” emphasizing that this is a bottleneck that China’s Ministry of Commerce could easily resolve.

Foreign media reports indicate that 22 European companies have sought assistance from the chamber, hoping to expedite approval for a total of 141 urgent export applications submitted to China.

In a related development, Reuters reported that John Moolenaar, Chairman of the U.S. House Select Committee on Strategic Competition between the United States and the Chinese Communist Party, urged the U.S. government on the 18th (Eastern Time) to restrict or suspend landing rights for Chinese airlines in the United States unless China fully restores the supply of rare earths and magnets.

Additionally, the U.S. should review export control policies related to the sale of commercial aircraft, parts, and maintenance services to China. Moolenaar stated, “These measures would send a clear message to Beijing that they cannot cut off critical supplies for America’s defense industrial base while their strategic sectors remain unaffected.”

Currently, due to persistently low demand for air travel between the U.S. and China, the number of flights actually operated by U.S. airlines to China represents only a small fraction of those approved.