The European Union is seeking coordinated action with the United States and other G7 partners after Beijing widened export controls on rare earths and associated processing technologies, EU officials said on Tuesday.
European Trade Commissioner Maroš Šefčovič described the measures as a “critical concern” following ministerial discussions in Denmark focused on trade security and supply chains.
China, the world’s dominant processor of rare earth elements, last week expanded its controls to include additional elements, tighter scrutiny for semiconductor-related users, and new restrictions on equipment used in mining and refining. The announcement followed an earlier round of controls this year and comes ahead of planned talks between Presidents Donald Trump and Xi Jinping.
Šefčovič said G7 finance ministers were likely to discuss options on Wednesday, with an early video call among partners under consideration. He also said he had been in contact with U.S. Commerce Secretary Howard Lutnick as Brussels and Washington examine potential joint steps.
Danish Foreign Minister Lars Rasmussen said the EU should present a unified position and engage closely with the United States. He argued for an EU response that relied on firm diplomacy rather than punitive tariffs, adding that alignment with Washington would increase leverage in discussions with Beijing.
The latest Chinese measures add to disruptions seen since April, when curbs on exports of certain rare earths and magnets led to component shortages in multiple sectors, notably automotive. Several European manufacturers reported interruptions as licence issuance slowed and magnet supply tightened. Subsequent deals with European and U.S. counterparts partly eased the squeeze, but inventories remain sensitive to new restrictions.
Washington has signalled a harder line. President Trump threatened to impose 100% tariffs on Chinese imports from 1 November, a move that contributed to sharp market swings last week and prompted warnings from U.S. retailers about costs heading into the year-end season. Officials later suggested scope for renewed engagement ahead of a possible late-October meeting with Xi, but the administration has kept tariff options on the table.
Beijing has defended its export controls as lawful and proportionate, arguing that national security and industrial policy require tighter oversight of materials and know-how. Chinese officials have also said the United States escalated tensions through blacklists and technology restrictions.
For the EU, the immediate focus is twofold: short-term supply assurance for manufacturers and longer-term diversification. Šefčovič indicated that coordination with G7 partners could include accelerated work on projects to extract and process critical minerals outside China, acknowledging that such initiatives have long lead times but can be expedited. Officials also pointed to ongoing discussions with the United States covering semiconductors, industrial inputs and critical raw materials.
Analysts note that China’s share of global refining capacity for rare earths remains above 80–90% for several key stages, leaving Western supply chains exposed when export licences slow or equipment is restricted. In parallel, China’s new rules add compliance requirements for foreign users of Chinese-origin inputs, potentially extending Beijing’s regulatory reach into downstream supply chains.
EU ministers meeting in Horsens reviewed contingency options including coordinated stock management, early warning mechanisms for critical components, and outreach to alternative suppliers. The European Commission is also expected to brief member states on potential use of trade defence instruments and cooperation channels with G7 partners to improve transparency around licences and customs processing.
The broader context includes ongoing tariff threats between Washington and Beijing and new port-related fees announced on both sides, adding to logistics uncertainty. Financial markets have reacted to the shifting signals, with losses on Friday followed by partial recoveries as rhetoric eased. European equities remain sensitive to developments in metals, technology and autos.
In the near term, EU officials said they would continue talks with Chinese counterparts while preparing joint positions with G7 partners. Šefčovič is expected to reach out to Beijing early next week. Any formal EU response will hinge on the pace of licence issuance from China, the impact on European manufacturers over the coming weeks, and the outcome of discussions among G7 finance ministers.
First published on eutoday.net.
China’s new rare-earth licensing tightens pressure on semiconductor supply chains
