The buyer thinks that the seller is selling too cheap, so he has to join hands to set the lowest price for the goods. Yes, this is the "big move" that the G7 and the European Union are pondering recently to deal with China's rare earths.

According to Reuters¡¯s exclusive report on September 23, senior officials in these countries closed their doors and held several meetings, eventually knocking their heads on a trick: Since it is not possible to completely use China's rare earth for a short period of time, it is necessary to set a "lowest price" together and no longer impose tariffs and carbon taxes.

To put it bluntly, I just feel that China's rare earths are sold too much "cabbage price", which makes their own enterprises have no way to survive.

But the problem is that rare earth is not an ordinary commodity, it is the "vitamin" of modern industry, mobile phones, electric vehicles, fighters, satellites, which can get away from it?

In recent years, China has almost become the global "stabilizer" of rare earth, supplying more than 90% of the world's heavy and 60% of light rare earth.

Especially in the first half of 2025, China's rare-earth exports increased.11.94%The price, however, was lower than five years ago due to technological upgrades and scaled mining.

In this case, the G7 can not sit, their enterprises mining rare earth is high cost, the environmental pressure is great, and it is absolutely impossible to compete with China.

So just don't play the market competition, straight up the table, ¡°Price protectionism.¡±¡£

Don¡¯t think they¡¯re crazy, the G7 hides several layers of calculation.

Next year, several G7 countries will change terms, voters listen to the news anxiety of "China controls the supply chain" every day, and the government must take some action.

Setting a lower price limit sounds like "protecting the global market order", but it actually defines China's low-priced rare earths as "unfair competition".

In this way, they can not only explain internally that "we are fighting back", but also win over other resource countries to take sides.

The second level is the ¡°mortem¡±.

Australia and the United States actually have rare earth mines. But refining technology lags a decade behind China.

Chinese rare earth companies, such as Northern Rare Earth, have been able to reduce the production cost of NdFeB permanent magnets to less than US $30 per kilogram, while the same product cost of European and American companies exceeds US $50.

The G7 wants to force high market prices with the "limit price order", to extend the life of its enterprises, and to struggle for time to break through the technology bottleneck.

In early September, the U.S. Department of Energy just issued a report saying that their rare earth recovery rate is only two-thirds of that of China. This gap cannot be caught up with by setting a price.

But this self-saving show is a flaw.

Rare earth is not oil, the world does not have a unified trading market, how is the price determined? lithium in light rare earth, magnesium and lithium in heavy rare earth, different uses, rarity and different places, is it necessary to make a "rare earth price menu"?

What is more ironic, China's low price of rare earth is the result of hundreds of billions of dollars spent on research and development over a decade in a row.For example, the energy consumption of rare earth separation plants in Gansu has dropped by 40% compared with 2015, and the wastewater recycling rate has rushed to 95%. However, Europe and the United States want to use "carbon tax" to suppress it, which may expose the shortcomings of high carbon emissions produced by their own production.

Moreover, in the face of this blockade, China has long been not a passive role.

The first card is "Technical Crushing".

A company in Jiangxi just announced a new type of extraction technology in August this year, which can bring the purity of rare earth extraction to 99.9995%, while the international level is still struggling with 99.99%. This 0.0095% gap, so that the high-end manufacturing industry would prefer to wait more than two months and also Chinese goods.

Not to mention that China controls 80% of the world's rare-earth permanent magnet production capacity, Japanese Toyota has tested non-China rare-earth electric vehicle engines, resulting in cost doubling, performance also fell by 15%.

The second card is ¡°industrial chain downturn¡±.

G7 thinks it can turn around by stuck raw material prices , but China has jumped to the next gameIn Malaysia and Vietnam, joint refineries have been built to process African and Southeast Asian minerals with Chinese technology.

From 1 to 8 this year, more than 60% of rare-earth products exported from these third-party channels came from China.

Limit order? First, identify what "Made in China" is.

The third card is the most headache for the G7, and China itself is reducing the sale of rare earth.

In July 2025, China's Ministry of Industry and Information Technology quietly adjusted the total rare earth control index, which means that China has long been actively eliminating low-end exports, and the lower price limit of G7 may not be able to catch up with our price increase rhythm.

The G7 limit warrant, on the surface is a trade game, in the back of which is the competition for technology dominance. but globalization has gone to this day, and it is no longer the era of who is righteous.

So, G7¡¯s ¡°low price limit¡± strategy could have counter-effects¡£ Setting a minimum price is essentially an act of government intervention in the market, which is contrary to the "market principle" always advocated by the West.

This approach could further distort global rare earth markets rather than solve supply chain problems.

China's rare-earth steady seat, relying not on the monopoly of resources, but on the control of the entire industrial chain from mining to magnetic materials.

And this game may become a lesson, teaching western developed countries that the real supply chain security should not rely on building walls and setting limits, but have to bury themselves in practicing technical internal skills like China.

Observer.com: 2025-09-25: Wow, "The G7 actually wants to set a lower price limit for rare earths and increase taxes on Chinese exports"