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The European Union is urging China to lift its strict export controls on rare earth minerals, warning that the new rules are putting European industries in serious jeopardy.

These materials are essential for manufacturing products such as electric cars, smartphones, and household appliances.

According to SCMP, EU Trade Commissioner Maros Sefcovic met with China's Commerce Minister Wang Wentao on Tuesday during a conference in Paris.

He told reporters on Wednesday, "I informed my Chinese counterpart about the alarming situation in the European car industry... Rare earths and permanent magnets are absolutely essential for industrial production."

Since April, China has required companies to apply for a license to export certain rare earth minerals and magnets.

These new rules were introduced during a period of heightened trade tensions with the United States. China controls approximately 90% of the world's rare earth processing and has approved only around a quarter of the numerous export requests it has received so far.

European manufacturers say the delays are slowing down factories and pushing some toward shutdown. Benjamin Krieger of CLEPA, Europe's automotive supplier group, said, "China's export restrictions are already shutting down production in Europe's supplier sector."

EU Protests China's Licensing Demands for Factory Photos

Businesses are also concerned about China's demand for sensitive information in order to get licenses.

Some applications have even been rejected due to minor paperwork issues. EU companies fear that sharing details, such as factory photos or intellectual property, could pose security risks.

According to Chinese customs data, shipments of rare earth magnets to Germany dropped by half between March and April.

Exports to the US dropped even more, by 60%. American officials are also frustrated, accusing China of not following through on promises made during a recent trade truce, CNN said.

To ease the situation, the EU has suggested that China switch to a simpler system. Instead of needing a separate license for every shipment, companies could apply for a single license per year.

Sefcovic said this would cut paperwork and reduce pressure on businesses.

In addition to these talks, the EU announced 13 new international projects aimed at helping Europe secure rare earths outside of China. Some of these projects are in Africa, Canada, and South America.

The export issue is the latest challenge in EU-China trade relations, where disagreements over medical devices, online shopping rules, and market access have already strained relations.

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China, EU