On October 9th, China suddenly announced new rare earth export regulations.
Trump is furious, the EU trade commissioner is in a hurry to jump, the Danish foreign minister shouted to unite with China, and even the G7 must urgently hold a video conference to discuss the response.
Whose nerves has this seemingly technical trade policy adjustment touched, and why is it making the entire Western camp so tense?What kind of game is hidden behind this?
The rare-earth new regulations introduced by China can be said to be a precise strike.
The content of the regulations may seem very technical, but it is actually very powerful: Any overseas product that uses Chinese rare-earth raw materials or technology, as long as the value of Chinese ingredients accounts for more than 0.1%, must be approved by China when exporting.
This 0.1% figure is not set casually.
to know, China controls over 80% of the world's rare earth supply chainFrom mining to refining processing, almost every link is inseparable from China.
Basically, the world's rare-earth related products must look at the face of China.
The Americans immediately exploded.
Trump went ballistic on social media, It threatened to impose a new 100% tariff on all Chinese imported US goods on the basis of the current relevant taxes.
This guy is also considering implementing software export controls against China, and relevant companies must apply for a license to do business.
The interesting thing is, Trump threatened sanctions with anger, and wrote on the Internet that he didn’t want to hurt China, but rather “help China.”
This statement sounds contradictory, and it’s estimated that he himself doesn’t even know exactly what he wants to do.
The U.S. trade representative’s reaction is even more ridiculous. Complain that China did not give advance notice.
Please, this is a trade policy adjustment, not a dinner treat. Why say hello in advance?
Europeans have reacted harder than Americans.
Six days after the new regulations were issued, EU Trade Commissioner Shevchenko was unable to sit down and publicly bombarded China's rare earth export controls as "unreasonable."
In the words of Shevchenko, there was real panic.
He said Restrictive measures have caused some EU companies to stop production, causing substantial economic harm.
It’s no surprise that Europe’s high-end manufacturing is heavily dependent on rare-earth materials, from electric vehicles to wind turbines, from smartphones to military-industrial equipment, in no way apart from these “industrial vitamins.”
What's even more surprising is that, Shevchovich actively revealed that he had discussed the matter with U.S. Commerce Secretary Lutnik.
What does that mean? It shows that the United States has begun to engage privately and is ready to jointly confront China.
Danish Foreign Minister Rasmussen's statement is more straightforward.
As the representative of the rotating EU presidency, he openly called for a collective show of strength to China, and also emphasized the strength of the EU as "the world's largest trade group".
This provocative statement, obviously, wants to pull the whole EU and China hard.
The U.S. and European sides soon reached a consensus on proposing to hold a G7 video conference as soon as possible to coordinate the response to China.
It seems that the Western camp was really scared by this rare-earth new rule.
In the face of the collective rebound from the West, China's attitude is quite calm.
Officials reiterated that the purpose of control is to maintain world peace and regional stability and fulfill international obligations such as non-proliferation.
This statement sounds very official and actually reveals China’s strategic thinking.
China also expressed its willingness to strengthen dialogue and exchanges with other countries on export controls and jointly safeguard the security and stability of global industrial and supply chains.
This gentle statement not only shows the willingness to cooperate, but also adheres to the policy stance.
From the timing point of view, this new regulation is introduced just right.
The current international situation is complex and changeable. The United States and Europe are desperately trying to build a supply chain system independent of China. China's timely intervention is tantamount to pouring cold water on their plan.
The impact of this new rare earth regulation is far more profound than it seems.
China's move has almost blocked all paths for the United States to evade controls through third-country processing.
Americans have made great efforts over the years to build a rare earth supply chain independent of China.
From Australia to Africa, from Greenland to Canada, we are looking for rare-earth resources everywhere and investing in processing facilities.
Now well, China’s new rules put these efforts at risk.
The EU is also good.
The high-end manufacturing industry in Europe was heavily dependent on rare earth in China, and now the regulation is tightened, and there are no alternatives in the short term.
No wonder some companies have begun to stop production.
More importantly, this incident made Europe and the United States realize that It is simply not feasible to fight alone on the issue of rare earths, and we must hold together to keep warm.
Shevchenko has made it clear that the EU and the G7 will accelerate joint projects to advance the mining or processing of critical minerals.
Such joint action will further bind the interests of Europe and the United States.
The rare earth strategy, which was originally fragmented, now needs to be unified and coordinated, which will have a profound impact on the global supply chain structure.
Despite the sword, the parties still have to return to the negotiating table to resolve the issue.
Shevcovic already plans to hold talks with senior Chinese officials next week to find a solution.
From a realistic perspective, the reconstruction of a complete rare-earth industrial chain takes a huge amount of time and money.
Europeans know in their hearts that it is impossible to get rid of their dependence on China's rare earths in the short term.
China also understands that excessive restrictive measures may accelerate the pace of other countries' search for alternatives.
Maintaining a moderate degree of flexibility that can safeguard one's own interests without outright irritating a partner requires a superb art of balancing.
Given the real needs of both sides, the likelihood that the EU and China will eventually reach some kind of compromise is still greater.
After all, in the era of globalization, completely disconnecting is not good for anyone.
Source of information:
Official website of the Ministry of Commerce of the People's Republic of China - New regulations on rare earth export control policy and related regulations
· Official website of the Ministry of Industry and Information Technology of the People's Republic of China-Rare earth industry management policies and export control implementation rules
·Press release by the Directorate-General for Trade of the European Commission-Commissioner Sevcovic's Official Statement on China's Rare Earth Controls
Official Statement of the Office of the U.S. Trade Representative - U.S. Official Response to China's Rare-Earth New Regulations and Policy Position
Danish Round Presidency Statement – Foreign Minister Rasmussen on behalf of the European Union
G7 Joint Official Communication – Multilateral Coordination Mechanism for Rare-Earth Supply Chain Security
·Record of the Regular Press Conference of the Ministry of Foreign Affairs of China-China's Authoritative Explanation on the Purpose of Rare Earth Export Control Policy