There was always reason to be sceptical. When the European Union and China met in July and agreed that licences for rare earth exports would be “fast-tracked” under pressure from the bloc, many in Brussels sighed with relief.
But six weeks on, that relief has turned to frustration, as Reuters reports, and for good reason. The latest report from the EU Chamber of Commerce in China reveals what should have been obvious: without enforceable, transparent mechanisms, diplomatic promises are little more than words.
Beijing’s export controls on rare earths are no small matter. These minerals—integral to the manufacture of electric vehicle motors, defence systems, electronics—are not luxury inputs but foundational to any modern strategy for industrial resilience. The fact that European automakers are idling factories, chip firms queuing anxiously for licenses, and many companies already incurring losses ought to be ringing alarm bells across every European Commission portfolio. Yet, for all the summit fanfare, the reality is that the bottlenecks remain, the licences are slow, and the risk of more shutdowns is now real enough to merit urgent attention.
From the outside, China’s posture is measured. The export restrictions are defended as “non-discriminatory” and fair on their face. Yet, the substance tells a different story. When fewer than a quarter of some 140 licence applications have been approved—despite the promises made in July—one must ask: was there ever any intention of change, or was this simply diplomacy’s theatre? The European Chamber’s own words—“we have not seen a material shift since the summit”—should embarrass more than a few European policymakers.
What the summit showed us, and what the ensuing weeks confirm, is that Europe is dangerously exposed. The bloc’s dependence on Chinese refining and processing of rare earths has long been acknowledged; what has been under-appreciated is how quickly control of supply can ripple into production lines, factory gates and, ultimately, jobs. Automakers cannot build cars without magnets. Chips without rare earth inputs become more expensive or unreliable. When one calm diplomatic meeting is allowed to paper over structural vulnerabilities, the next shutdown is never far behind.
It is tempting to believe that the answer lies in friendly negotiations, or mild public rebukes. But the Chamber’s assessments make clear that what is required is far more substantial: strategic planning, diversification of supply, investment in processing capacity within Europe, and perhaps above all, a willingness to accept that unfettered globalisation has its perils. Europe must no longer treat supply chain security as an optional afterthought. The current situation exposes a geopolitical truth: economic linkages without leverage are no guarantee of stability.
One senses that what has been missing since July is accountability. What enforcement mechanism is in place for the “fast-tracking” pledge? What transparency over the decision processes in China? Where is the assurance that companies will not be arbitrarily delayed or blocked? Instead, what the Chamber describes—licence approvals slowing just two months after the summit—smacks of signalling rather than substance.
Europe’s leadership must also ask meta-questions. Are we investing enough in critical minerals extraction, refinement and magnet manufacture? The global transition to electric vehicles, renewable energy, advanced communications, defence systems—all of these rest on raw materials. Yet Europe remains far behind. While China has built up infrastructure and command over the rare earth supply chains, Europe has relied excessively on external stability. Stability that was always contingent on goodwill, not guaranteed by reciprocity.
There is hypocrisy in the current posture, too. The EU expects China to play fair on licenses, logistics, regulatory predictability. Meanwhile, Europe is still slow to impose its own export restrictions, build refining capacity, fund R&D for alternatives, or secure recycling schemes. The response cannot merely be the hope that China will continue to permit access at tolerable cost. That hope has been tested—and has shown cracks.
Some may argue that Europe needs China as much as China needs Europe: markets, investment, trade. But dependence is a one-way street when the supplier holds the cards. Europe imports, China processes, China decides who gets the goods and when. That model was fine for decades of cheap inputs and benign outlooks. It is no longer fit for purpose in an era of strategic rivalry. When industrial policy becomes foreign policy, every factory is a potential front in a geopolitical tension.
If Europe does not act decisively now, more companies will close lines, jobs will go, and temperature from consumers—already accustomed to delays and rising prices—will spike. The next European Commission must make rare earth security a top priority, not a footnote. That means funding new mines, new refining plants, creating certification regimes that ensure supply from non-Chinese sources, and possibly even strategic reserves. Because in today’s world, supply chains are not just commercial pathways; they are strategic maps.
Europe’s recent diplomatic success in July should have been the opening salvo of a broader, systemic countermeasure. Instead, what followed reads like complacency. China’s rare earth controls are not simply an economic irritant; they are a test of Europe’s industrial independence. And so far, Europe is failing that test. To preserve sovereignty, security and prosperity in the decades ahead, Brussels must shift from rhetorical diplomacy to unyielding strategic realism.
Main Image: By Peggy Greb, US department of agriculture – http://www.ars.usda.gov/is/graphics/photos/jun05/d115-1.htm, Public Domain, https://commons.wikimedia.org/w/index.php?curid=10512749
China Signals Readiness to Expedite Rare Earth Exports to the EU as Trade Negotiations Advance
