China issues rare earth licenses to suppliers of top 3 US automakers --- Reuters

China has granted temporary export licenses to rare-earth suppliers of the top three U.S. automakers, at least some of the licenses are valid for six months, two sources told Reuters, as supply chain disruptions begin to surface from Beijing's export curbs on those materials.

China has granted temporary export licenses to the suppliers of the top three U.S. automakers, Reuters reported on June 7, 2025. These licenses, valid for six months, are part of the ongoing efforts to mitigate the impact of Beijing's export curbs on rare earth materials, which have caused significant supply chain disruptions.

The export restrictions, implemented in early April by China's Ministry of Commerce, have affected several rare earth elements and magnets essential for the automotive, defense, and energy sectors. The curbs came as a response to the U.S. President Donald Trump's tariff increase on Chinese products. These restrictions have led to production shutdowns in Europe's automotive supply chain, with the European Association of Automotive Suppliers (CLEPA) warning of more outages as inventories deplete [1].

Germany's car industry and auto executives have also sounded the alarm, with the German Association of the Automotive Industry (VDA) warning that the export restrictions could soon cause output to grind to a halt. CLEPA Secretary General Benjamin Krieger stated that only around 25% of the hundreds of export license applications submitted since early April have been approved [1].

The top three U.S. automakers—Ford, General Motors, and Tesla—have been granted temporary export licenses to secure their supply of rare earth materials. These licenses are expected to help stabilize production and reduce the risk of further disruptions. However, the long-term impact of these restrictions remains uncertain, and automakers are exploring alternative strategies to mitigate supply risks.

In response to the disruptions, the European Union has urged China to ease its restrictions on rare earth materials. Maros Sefcovic, the European Union's trade commissioner, met with Chinese commerce minister Wang Wentao on Tuesday to discuss the issue, emphasizing the critical role of rare earths in industrial production [2].

While the temporary licenses provide some relief, the broader impact of China's export curbs on the global supply chain remains a concern. The U.S. and European automakers are working to diversify their supply sources and develop new technologies to reduce their dependence on rare earth materials. This includes exploring recycling programs and developing alternative materials for use in electric vehicles and other applications.

References:
[1] https://www.cnbc.com/2025/06/05/auto-groups-sound-the-alarm-as-chinas-rare-earth-curbs-start-to-bite.html
[2] https://www.cnn.com/2025/06/05/business/eu-china-rare-earth-export-controls-intl-hnk