European Firms Still Struggle to Access Crucial Chinese Rare Earth Supplies

European Firms Still Face Challenges in Securing Chinese Rare Earths BEIJING, CHINA - Despite a July agreement to speed up exports, European companies continue to struggle with accessing crucial rare earth minerals from China, according to the European Union Chamber of Commerce in China. The business lobby warned on Wednesday that many small and medium-sized enterprises (SMEs) are experiencing significant supply chain disruptions due to Beijing's licensing requirements for certain exports. Since April, China has required licenses for exporting some rare earths, which have sent ripple effects across global manufacturing sectors. In July, European Union chief Ursula von der Leyen said that leaders had agreed on an improved mechanism for Chinese exports of rare earth minerals to the bloc. However, the chamber's annual position paper released Wednesday revealed that many companies are still facing difficulties in securing access to these strategic minerals. "We have seen some progress in recent months, but it is clear that more needs to be done," said Jens Eskelund, President of the European Union Chamber of Commerce in China. "The current system is not providing a long-term, sustainable solution for our members." China dominates the global industry for extracting and refining rare earths, giving it significant leverage in trade negotiations. The country's control over these minerals has been a major point of contention in the ongoing trade war with Washington. The European Union Chamber of Commerce in China estimates that 70% of the world's rare earth production is controlled by Chinese companies. The chamber's position paper highlights the need for a more streamlined and predictable export system to support European businesses. "The current situation is not sustainable," said Eskelund. "We urge the Chinese government to work with us to find a solution that benefits both our economies." The lack of access to rare earths has significant economic implications for European companies, particularly in industries such as electronics, automotive, and renewable energy. The chamber's position paper notes that many SMEs are struggling to adapt to the new export requirements, which could lead to supply chain disruptions and increased costs. As trade tensions between China and the United States continue to escalate, the rare earth dispute is likely to remain a major point of contention in future negotiations. The European Union Chamber of Commerce in China will continue to push for a more stable and predictable export system to support its member companies. In a statement, the Chinese Ministry of Commerce said that it was working with European businesses to address their concerns and improve the export process. However, no specific timeline or solution has been announced. The rare earth dispute highlights the complex trade dynamics between China and Europe, where economic interests are closely tied to diplomatic relations. As tensions continue to rise, both sides will need to find a mutually beneficial solution to avoid further disruptions to global supply chains. *Reporting by Fortune.*