A group representing U.S. auto suppliers called for immediate action on Wednesday to address China’s restrictions on rare earth exports, warning that the issue could soon disrupt auto parts production. The call comes as China, which controls over 90% of global processing capacity for rare earths, imposed tighter export regulations in April, requiring exporters to obtain licenses from Beijing. These restrictions were introduced after the trade war between the U.S. and China escalated following tariffs imposed by President Donald Trump.
Impact on the Auto Industry
The Motor & Equipment Manufacturers Association (MEMA), which represents vehicle suppliers, expressed grave concerns over the potential disruption to the supply chain. According to MEMA, parts companies are facing “serious, real-time risks” to their operations. The association emphasized that without reliable access to rare earth elements and magnets, essential automotive components like automatic transmissions, throttle bodies, alternators, motors, sensors, seat belts, and cameras could be at risk of production delays.
Urgency for Immediate Action
MEMA has raised alarms about the issue since early May, calling on the U.S. administration to address the growing crisis. In a joint letter with major trade groups from General Motors, Toyota, Volkswagen, Hyundai, and others, MEMA urged the White House to take “immediate and decisive action” to prevent further disruption. The letter highlights the impact on both automotive suppliers and manufacturers who depend on these critical materials for production.
China’s Export Control Impact
China’s export of rare-earth magnets has been significantly reduced, with shipments halving in April due to the opaque permit process. The application process for the permits is complex, requiring detailed documentation that can sometimes exceed hundreds of pages. These stringent measures have put U.S. manufacturers at a disadvantage and are already impacting production schedules.
Reactions and Trade Tensions
In response to these restrictions, President Donald Trump took to social media last Friday, accusing China of violating the terms of a deal made in May to dial back tariffs. The restrictions have already taken a toll on U.S. automakers, with Ford shutting down production of its Explorer SUV for a week in May due to the rare-earth shortage.
