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Editor | L.Y.
Preliminary
Unable to accept China's "one-vote veto" on the global high-tech industry chain, the G7 and the EU together 31 countries, this time completely broke.
In early October, after China comprehensively upgraded its rare earth control, both the United States and Europe were in chaos.
At 17:43 on October 9, the Ministry of Commerce and the General Administration of Customs of China jointly issued an announcement through the official website to officially implement export controls on some medium and heavy rare earth-related items. The new regulations will officially take effect on November 8, 2025. This document, which is regarded as an "control upgrade" by the outside world, clearly includes five types of rare earth items in the control list: including holmium-related permanent magnet materials and crystal materials, erbium-related optical fiber materials and hydrogen storage materials, thulium-related luminescent materials, europium-related phosphors, and ytterbium-related heat shielding coating materials, etc., covering many key fields such as new energy, semiconductors, and military industry.
The most deterrent clause of the new regulation lies in the strengthening of control details: export operators need to apply for permission, customs reporting must be marked "belongs to two-purpose items" and list the control code, parameters close to the control items goods need to be further explained and filled in detailed indicators, customs on information stored goods can be suspended.
China's absolute dominant position in the field of rare earths gives the new regulations the power of "sealing the throat with one sword." The latest report from the U.S. Geological Survey in October showed that China accounted for 92% of global heavy rare earth production, of which holmium, erbium and other elements are core materials for new energy vehicle motors and wind turbines. Each U.S. F-35 fighter engine consumes 6 kilograms of rare earth permanent magnets, but its local heavy rare earth production is almost zero; European Commission data also shows that 85% of the rare earths in the 27 EU countries rely on China for imports, and 90% of the NdFeB magnets needed for semiconductor manufacturing come from China's supply chain.
Western industrial chain “shake”, enterprise emergency response
After China's new regulations landed, the panic of the western industrial chain spread rapidly within a week.On October 12, Volkswagen Group Germany urgently convened a global supply chain conference, its new energy vehicle business head revealed that the group's uranium element inventory can only sustain production for 3 months, if it cannot be licensed through China's "Speed Channel", the ID of the German Wolfsburg factory.
On October 14, the U.S. Navy issued an early warning, saying its production of "Standard - 6" anti-aircraft missiles due to a shortage of uranium elements, the delivery cycle will be extended from 12 months to 18 months, and the U.S. Navy has been forced to cut its purchase orders for 2026. on the same day, Toyota Motor Corporation announced the suspension of Toyota County hybrid motor production line reform program, the original planned investment of $1.2 billion in funds for the reason of "unable to determine the stability of the supply of rare earth".
The concerns of companies quickly spread to the government level.EU Trade Commissioner Shevchenko openly stated on October 14 that Chinese regulations have caused the shutdown of some EU companies, causing substantial economic damage, and revealed that it has consulted with U.S. Trade Minister Lutnik to hold a G7 video conference to coordinate response strategies.
31 countries unite to attack
On October 15, the United States, Japan, Germany and other G7 member states and the 27 European Union formally formed a joint camp. The 31 countries jointly submitted a complaint document to the WTO, accusing China's rare earth control of "violating WTO rules and constituting unfair competition" and demanding that China revoke the new rules within 60 days, otherwise "trade retaliation measures" will be initiated. In the appeal document, 31 countries put forward demands such as "transparency of rare earth export prices" and "elimination of country quota differences" in an attempt to weaken China's dominance.
On the same day, 31 countries issued the "Joint Statement on Ensuring the Security of the Rare Earth Supply Chain" in Brussels, launching three countermeasures: First, the United States, Canada, and Australia took the lead in establishing a "Rare Earth Supply Chain Mutual Assistance Mechanism", which plans to increase the proportion of non-medium rare earths before 2030. However, an internal report from the U.S. Department of Energy shows that even if the Mountain Pass rare earth mine is at full capacity production.
By 2030, the U.S. indigenous rare earth can only meet the demand of 15%; second, the Chinese production of rare earth permanent magnets, new energy car engines and other downstream products will be charged with a 100% tariff, Trump has openly said "thinking about additional tariffs on all Chinese imported goods"; third, the EU has announced an investment of € 5 billion, the United States and Japanese research and development of alternative materials, the goal of achieving "partial replacement" in the military industry by 2028, but the German Map Institute study shows that the advantage of rare earth performance can not be replaced in the short term.
The United States is the most radical in this action. On the afternoon of October 15, U.S. Trade Representative Dai Qi bluntly stated at a press conference in Washington that China's rare earth control is "economic coercion." If China does not relent, it will unite its allies to promote decoupling of the Chinese economy, including restricting China companies from entering the U.S. rare earth processing market and prohibiting U.S. financial institutions from financing Chinese companies.
China reacted harshly and prepared to land.
In the face of the intense challenges of 31 countries, China's foreign and foreign trade system responded quickly. On October 13, the consul general in Munich, Churchill, published a signed article in the German magazine "New Solidarity", clearly pointing out that China's rare-earth control "complies with international practice", 13 countries around the world have implemented similar measures, and China has set up a "fast channel" for European enterprises, and more than 60 percent of EU enterprises have been licensed through the channel in the first half of 2025.
conclusion
On October 16, a spokesman for the Ministry of Commerce of China responded further in the routine conference, saying that "China's controls are not aimed at specific countries, normal needs of enterprises can be guaranteed through legal procedures", while warning that "any trade retaliation will be counter-reacted". on the same day, the General Administration of Customs of China simultaneously issued an announcement, announcing that from October 25th, imported from the G7 and the EU countries of automobiles, mechanical equipment and other products implemented "key inspection", inspection rate increased from 5% to 30%, customs time extended to 72 hours, directly responding to the tariff threat of 31 countries.
The Rare-Earth Industry Association of China revealed on October 16 that 12 large rare-earth enterprises in China have established a “reserve alliance”, which plans to reserve 150,000 tons of heavy rare-earth by the end of 2025 to further consolidate supply dominance.
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