China Pumps Brakes On Critical Exports Related to U.S. Autos and Defense Industries
China is one of the world’s most prolific exporters of rare earth metals and raw materials needed to build everything from electric vehicles to fighter jets. The U.S. relies heavily on those components, including in the automotive industry, which is why China’s recent decision to halt exports could be extremely disruptive.
China is one of the world’s most prolific exporters of rare earth metals and raw materials needed to build everything from electric vehicles to fighter jets. The U.S. relies heavily on those components, including in the automotive industry, which is why China’s recent decision to halt exports could be extremely disruptive.
China’s actions are part of its response to the dramatic increase in tariffs announced by President Trump earlier this month. Under the new rules, the materials can only be exported with special export licenses, but officials in the country are only just getting started creating a system to vet applicants and issue those licenses. At least one business owner told The New York Times that his company received word that it could be up to 45 days before permits could be issued and exports resume.
While the export restrictions will hit EV production hardest, gas vehicles rely on some of the materials and electric components, including power steering parts and other systems. Tariffs on car parts also start in May, which will impact almost every vehicle sold here, including those made here by American brands. Car parts come from every corner of the globe, including China, with some of the most iconic American vehicles containing large portions of imported content.
[Images: General Motors, Volkswagen, BMW Group]
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