and a)
October 23, 2025, Brussels, EU Autumn Summit.
French President Emmanuel Macron hit the paperboard on the table and threw a sentence to the leaders of the 27 countries: "China will not give rare earth anymore, we will launch the nuclear option!"
The whole scene was quiet for a moment, and only the sound of the current in the translator's ear remained.
Then, at the Berlin Global Dialogue Venue, Bundesbank President Nagel took the microphone and raised the tone by another octave: "If revenge is the last resort, then do the big ticket!"
Two sentences made global financial headlines in less than 72 hours.
This is Europe's worst "mixed double" against China in 2025.
But the more popular the plot, the more it looks like an old movie is re-released-the harsh words are new, the script is old, and the audience has already spoilt the ending.
( 2 )
Let's calculate a "rare earth shock account" for Europe first.
From April 10, 2025, China officially implemented export controls on 7 categories of medium-sized rare lands such as uranium, uranium, uranium, uranium, uranium, uranium and uranium, and the approval cycle was extended from 15 days to 60 days.
On October 9, the second wave of overweight: centrifugal extraction equipment, bastnaesite, holmium, erbium, thulium, europium and ytterbium, and all overseas return items were all included in the "Export Control List of Dual-Use Items".
92% of the world's rare earth refining capacity is in China, and European stocks are only enough for an average of seven weeks.
The German Automobile Industry Federation estimates:
- A PHEV motor will use 0.4 kilograms of uranium, if it does not get the license by December, Volkswagen, BMW and Mercedes will be forced to cut production in the first quarter of next year, equivalent to less than 9 billion euros;
--BASF's Catalyst Department warned that the prices of terbium and dysprosium have increased by 140% and 142% respectively compared with the beginning of the year. If they continue to soar, the average cost of electric vehicles in Europe will increase by another 1200 euros per vehicle in 2026.
France is in panic.
Airbus A350 body composite material polished powder, 94% of uranium imported from China;
Leap engine sheet monocrystalline alloy contains 0.08 percent uranium, and once it is admitted, the Toulouse General Assembly delivered less than 12 engines per month, equivalent to $2.5 billion monthly orders.
The so-called "nuclear option", before it is pressed, test it on yourself first.
(3)
The "nuclear option" mentioned by Europeans, officially called the "Anti-Coercion Instruments Act" (ACI), will come into effect at the end of 2023 and has had zero actual combat so far.
It allows the EU to impose punitive tariffs, freeze investment, and even suspend intellectual property protection on third countries when it determines that it has encountered "economic coercion"-in a word, kill one thousand enemies and hurt eight hundred itself.
Macron showed it in public on October 23rd, on the grounds that China's control of rare earths is "obviously coercive".
Nagel was more radical, speaking directly in Berlin: “There must be a bold decision.”
But as soon as the two men left, the European Commission quietly handed in an internal memo:
If ACI is applied to China, EU inflation will rise by an additional 0.6 percentage points, and GDP growth will fall by another 0.4% in 2026 – in the face of Germany, which is already “three in a row”, which is equivalent to covering the publicity of the recession in advance in the 2025 statistical communiqué.
So, a dramatic scene appeared:
In the summit communiqué, Macron's "immediate launch of ACI" was deleted with only one sentence "will make full use of existing trading tools";
German Chancellor Merz faced reporters after the meeting and would only repeat a round-the-clock sentence: "Leave it to the European Commission for technical evaluation."
The harsh words are from France, the safety plug is from Germany, and finally, the EU's mouth is soft.
and 4 )
On China's side, the rhythm is so stable that foreign media can only describe it as "surgery".
The first round of control in April was played with the "resource card";
In the second round in October, the upgrade was made to "technology + equipment + returned items", which directly cut off the way forward for Europe and the United States to "detour and build chains" in third countries.
More importantly, Beijing has combined the "rare earth brand" and the "market brand":
China's counterattack is as accurate as a surgical knife. Open the green light channel quietly to German BMW and Volkswagen, these "friends of rule". The capital market immediately voted with its feet, and the shares of BMW and Volkswagen ADR rose.
European TTF natural gas futures have fallen for three consecutive days. The market is betting that "the EU does not dare to really break its face, and industrial demand expectations are lowered."
In one sentence:
The Europeans use hard talk as tactics, the Chinese use the industrial chain as a strategy, and time will always stand on the side that can create alternatives.
and V)
What do you think of America?
Washington, of course, is pleased to see the EU as a “fringing bird”, but the Trump 2.0 administration just raised tariffs on European steel to 30 percent in August this year, and Nagel himself is still in South Africa to whisper “US tariffs could plunge Germany into a third consecutive year of recession in 2025.”
The cross-Atlantic plastic brotherhood, at any time because of the tariffs, does the EU dare to stretch the front against China?
What is more realistic is that the United States itself is also in the rare earth pit.
MP Materials' mine in California is sent to Sichuan, China, for separation and then brought back to the United States every year, with a round trip of 12,000 nautical miles, and the cost is 22% higher than buying Chinese materials directly;
Now China has also included "foreign returned items" in the control, MP Materials directly laid gun, the stock price fell 11% on the same day on October 9.
The Washington Trade Representative’s office had to privately persuade Brussels: “Don’t be impulsive before we build the deep-processing plant in Malaysia.”
The Allies' subtitle: Wait for me for five years.
Five years later, Europe's green transformation has long been dragged into a "brown transformation" due to rare earth cuts. Macron's 2030 carbon neutrality goal can only be changed to "do your best in 2045."
( 6 )
Will Europe really be “disconnected”?
The numbers do not lie.
In the three quarters before 2025, China’s exports of electric vehicles to Europe continued to grow by 38 percent, only to decline by 12 percentage points from last year.
--Europe's actual investment in China was USD 9 billion, an increase of 5% year-on-year. The three German chemical giants BASF, Covestro and Evonik also expanded their bases in Zhanjiang and Shanghai;
— — The latest data of the Euro Settlement Bank: in September, the Euro-China trade settlement amounted to EUR 11.36 billion, an increase of 4%, and the RMB settlement accounted for the first time to break 20%.
The industrial chain is like a rubber strap, the longer the politician pulls it, and the more painful the business hits it.
So the European Board of Directors gave politicians a lesson with banknotes:
On October 25, 50 European companies jointly sent a letter to the European Commission, requesting "to avoid using ACI against China under any circumstances." The signature form includes Mercedes-Benz, Airbus, Nokia, Asmail, and L'Oréal-from cars to airplanes, from chips to lipsticks, everything is indispensable to the China supply chain.
This is the black humor of globalization: politicians are responsible for speech, and companies are responsible for rubbing their ass.
The Seven
Back to the two words of Macron and Nagel.
Lao Gao gave each of them a Chinese saying:
“A dog that doesn’t bite.”
“The dogs who bite—usually have secretly completed the vaccine.”
The rare earth story in 2025 is likely to end this way:
-Macron said in Paris: "I defended European interests";
--Nagel said in Frankfurt: "We avoided the worst";
Beijing said: “China has always upheld the multilateral trade system.”
Three wins means no one asks where the “nuclear option” is going.
The answer is simple:
It was brought by politicians when fireworks were put on, illuminated the night sky, and also illuminated the face of themselves who did not dare to really pull the trigger.
So, before the next time Europeans want to "do big tickets", they might as well count them:
How many electric vehicles are labeled with rare earth in China?
In our stock market, there are many century-old stores that rely on orders from China to survive.
No matter how loud the malicious words are, they can't match a simple arithmetic problem:
92 percent of the world’s rare-earth refining capacity is in China, while 100 percent of the European voting ballots must be taxed by their own companies.
Europeans, take it easy-
Don’t play the “nuclear option” as the “hello option”.
Finally, blow yourself into the harmony out of the industrial chain.