China’s Ministry of Commerce has started issuing more export licenses for shipments of rare earth magnets in recent days and said on Saturday that it might be willing to speed up approvals for shipments to European Union companies. But the overall pace remains slow, and China appears committed to keeping licensing requirements introduced two months ago.
Many factories in the automotive sector and other industries in Europe and the United States, and a few in Japan, are running low on the magnets. China makes 90 percent of the world’s supply of these magnets, which are essential for cars, drones, factory robots, missiles and many other technologies.
China’s hint on Saturday that it might be willing to do a deal with the European Union on rare earths came as top American officials prepare to hold broad economic talks with Chinese officials on Monday in London, including a discussion of rare earths.
China’s commerce minister, Wang Wentao, and Maros Sefcovic, the European trade commissioner, discussed during talks on Tuesday in France whether Beijing might grant faster approval of export licenses for rare earths, the ministry said on its website.
In the talks, Mr. Wang “stressed that export controls on products such as rare earth are an internationally established practice,” the ministry said. But he also noted that “China attaches great importance to European concerns and is willing to create a green channel to expedite approval for eligible applications.”
The ministry’s statement on Saturday alluded to what China wants in return. Mr. Wang traveled to France to demand that the European Union reduce or end its anti-subsidy tariffs on electric cars from China. He has also asked that the bloc allow the shipment of the latest high-tech manufacturing equipment to China, although some of that equipment may have military applications.
On rare earths, the ministry said, Mr. Wang “expressed the hope that the E.U. will meet each other halfway and take effective measures to facilitate, safeguard and promote the compliance trade of high-tech products to China.” The bloc has been reluctant to make concessions on these issues, but faces mounting pressure from manufacturers to reach a deal with Beijing that will allow a full supply of rare earths to resume.
After a 90-minute call on Thursday with Xi Jinping, China’s top leader, President Trump wrote on social media that the two men had discussed rare earths. Mr. Trump mentioned that rare earths were a complex subject but did not indicate whether anything had been decided about China’s strict export licensing requirement, which Beijing imposed on April 4.
Mr. Trump wrote on social media on Friday that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and United States Trade Representative Jamieson Greer would hold further economic talks on Monday in London with top Chinese officials.
When Mr. Trump was asked later on Air Force One whether Mr. Xi had agreed to allow rare earth minerals and magnets to flow to the United States, Mr. Trump replied, “Yes, he did,” but did not elaborate.
China’s statement on Thursday about the call did not mention rare earths, however. Lin Jian, a spokesman for China’s Foreign Ministry, declined to answer a question about the minerals on Friday at the ministry’s daily briefing, saying that it was a matter for other agencies.
The American and European chambers of commerce in China each said on Friday that somewhat more export licenses had been issued in recent days. But both groups emphasized that more were needed, as China’s Ministry of Commerce faces a huge backlog of detailed applications for licenses.
The ministry approved some licenses on May 26 for parts suppliers of American automakers, and more licenses early this week. But carmakers use dozens of magnets for each gasoline-powered car and even more for electric cars, and they have faced difficulties obtaining licenses for all the different kinds of magnets they need.
Jens Eskelund, the president of the European Union Chamber of Commerce in China, called for more exports from China. “Our members are still struggling with the export license approval process, due to both the time it takes and the lack of transparency, and this is now negatively impacting production lines in Europe and other countries,” he said in a statement on Friday before Mr. Trump announced that further talks would be held in London.
Michael Hart, the president of the American Chamber of Commerce in China, said on Friday that he was not aware of any change in China’s rare earth policy after the call between Mr. Trump and Mr. Xi, but expressed hope that the conversation might improve the odds that more licenses would be issued.
“It can’t hurt, the fact that both presidents were talking,” Mr. Hart said in a telephone interview.
Rare earth metals, a group of 17 elements found near the bottom of the periodic table, have a wide range of industrial applications. China produces practically the entire world’s supply of seven of the least common rare earths, including three that are crucial in making very powerful, heat-resistant magnets.
On April 4, two days after Mr. Trump sharply increased tariffs on imports from China, China banned all exports except those approved by licenses for the seven rare earths and magnets made from them.
Jin Canrong, a professor of international relations at Renmin University in Beijing and an influential adviser to the Chinese government, said that China did not appear to have made any concessions on rare earth supplies during or after the conversation between Mr. Trump and Mr. Xi.
“We will definitely use the rare earth card to force Trump to make concessions,” Mr. Jin wrote on his blog. “Regarding the rare earth export control policy, the Chinese leaders will not simply make any promises to Trump, and it will be handed over to the negotiation team to continue the discussion.”
Mr. Jin said that China’s rare earth export restrictions had proven more effective than he expected in putting pressure on Mr. Trump to negotiate on trade issues. “Trump specifically mentioned the rare earth issue on social media, which shows that he attaches great importance to it, and also shows that our playing this card is quite effective,” he said.
But Beijing runs the risk that global manufacturers will decide that it is too risky to depend on China for any crucial components, not just rare earths, and will more readily shift contracts to India, Vietnam, Mexico and other countries.
“We must reduce our dependencies on all countries, particularly on a number of countries like China on which we are more than 100 percent dependent,” Stéphane Séjourné, the European commissioner for industrial strategy, said at a news conference on Wednesday. “The export bans increase our will to diversify.”
On Friday, the American Chamber of Commerce in China issued the results of a survey it conducted last week. Five American industrial or technology companies said they would run out of rare earth materials and face disruption to their operations in less than a month and four more in less than three months.
Some Chinese suppliers to American companies have received licenses to export limited numbers of magnets in the next six months, but this may not meet demand, Mr. Hart said. Chinese companies appear reluctant to seek permission for large shipments because these might be diverted to American military contractors, and China is trying to cut these companies off.
Chris Buckley, Jonathan Swan and Hisako Ueno contributed reporting. Li You and Siyi Zhao contributed research.
Keith Bradsher is the Beijing bureau chief for The Times. He previously served as bureau chief in Shanghai, Hong Kong and Detroit and as a Washington correspondent. He has lived and reported in mainland China through the pandemic.
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