Global alarm after China restricts critical mineral exports. The auto industry and production around the world are threatened

China's concern on critical minerals increased on Tuesday after global car manufacturers joined American counterparts to warn that Beijing restrictions on rare alloys, mixtures and magnets could cause delays and even stopping stops if there is no solution.

China restricts critical mineral exports because of the war with the US: Archive

German car manufacturers have become the last ones to warn that China's restrictions are threatening to stop production and shake local economies, after a similar complaint from an Indian electric vehicle manufacturer last week, according to Reuters.

China's decision of April to suspend the exports of a wide range of critical minerals and magnets has upset central supply chains for car manufacturers, aerospace producers, semiconductor companies and military contractors around the world.

The measure emphasizes China's domination in the essential mineral industry and is seen as a lever by China in its commercial war with US President Donald Trump.

Trump has tried to redefine the commercial relationship with the main economic rival of the United States, China, by imposing high tariffs for billions of imported goods, hoping to reduce a large commercial deficit and bring the lost production to the country.

Trump imposed China customs tariffs of up to 145%, to reduce them later, after stock markets, bonds and foreign currencies have revolted because of the radical nature of taxes. China responded with its own rates and capitalizes its dominant position in key supply chains to convince Trump to give up.

Trump and Chinese President Xi Jinping are expected to discuss this week, reporters told the White House spokesman, Karoline Leavitt on Tuesday, and the export prohibition will be a priority on the agenda.

“I can assure you that the administration actively monitors China's compliance with the Geneva Commercial Agreement.”she said.

“Our administration officials continue to be employed in the correspondence with their Chinese counterparts”, Leavitt said.

Trump has previously pointed out that China's slow pace of relaxation of critical mineral export is a violation of the Geneva Agreement.

The deliveries of magnets, essential for the assembly of numerous products, from cars and drones to robots and rockets, have been stopped in many Chinese ports while license applications are made through the Chinese regulatory system.

The suspension caused anxiety in the Board of Directors of the enterprises and in the capitals of the nations – from Tokyo to Washington – while officials have endeavored to identify limited alternative options, against the background of fears that the production of new car and other articles could be stopped until the end of the summer.

“If the situation does not change rapidly, the delays and even the interruptions of the production can no longer be excluded”, Hildegard Mueller, the head of the German car lobby for Reuters, said Tuesday.

Frank Fannon, consultant in the mineral industry and former US Secretary of State for Energy Resources during Trump's first term, said global disturbances are not shocking for those attentive.

“I do not think anyone should be surprised by how this situation takes place. We have a production challenge (in the US) and we have to take advantage of our approach to the whole government to ensure resources and increase the internal capacity as soon as possible. The time horizon to do this was yesterday.” said Fannon.

Diplomats, car manufacturers and other directors from India, Japan and Europe have urgently applied for meetings with Beijing officials to request faster approval of rare earth magnets, sources for Reuters said, because the shortage threatens to stop the global supply chains.

A business delegation from Japan will visit Beijing in early June to meet the Ministry of Commerce in relation to restrictions, and European diplomats in countries with high car industries have also requested “emergency” meetings with Chinese officials in recent weeks, Reuters reported.