\u201cLiberation Day\u201d tariffs<\/a>.<\/p>\nRare earths are a group of 17 elements vital for technologies ranging from smartphones and electric vehicles to weapons and spacecraft.<\/p>\n
The chamber noted that export controls have become a defining feature of the US-China trade war, with Beijing\u2019s moves appearing to have been effective in forcing Washington to the negotiating table.<\/p>\n
But Beijing\u2019s measures \u2013 sometimes broader in scope than international equivalents \u2013 are applied globally, subjecting all trading partners to the same sweeping restrictions.<\/p>\n
Following a meeting between Trump and President Xi Jinping, Beijing suspended its sweeping October rare earth export controls, putting a one-year pause on measures that for the first time included extraterritorial provisions.<\/p>\n
This means that, after the suspension expires in November, firms may require Beijing\u2019s approval to ship products containing Chinese inputs to third countries, even if they are manufactured outside China.<\/p>\n
Two wrongs don\u2019t make a right … We don\u2019t want to race to the bottom<\/p>\n
Jens Eskelund, EU Chamber of Commerce in China<\/p>\n
According to the chamber, these extraterritorial provisions represent the most serious risk to EU companies, many of which find it impossible to prepare for their roll-out without further clarity on how the rules will be applied.<\/p>\n
\u201cWhat we\u2019re looking for right now is some sort of guidance on where this is going,\u201d Eskelund said, adding that businesses require visibility beyond the November deadline. \u201cI think this is part and parcel of China\u2019s present effort of trying to convince the world that China is a stable, reliable and predictable partner for international business.\u201d<\/p>\n
A series of European leaders have been visiting China since late last year \u2013 including French President Emmanuel Macron, UK Prime Minister Keir Starmer and German Chancellor Friedrich Merz \u2013 as the continent seeks to stabilise trade ties and assert its own economic interests amid volatile US-China relations.<\/p>\n
Beijing has begun granting general licences with lengthier terms for exports of rare earth elements, including to European companies. But the licensing process is often slow, uncoordinated and opaque, the report noted.<\/p>\n
It added that the detailed technical information required for applications enables Beijing to map global critical dependencies down to the geographic, company, product and component levels.<\/p>\n
The chamber warned that China\u2019s grip on critical supply chains and its willingness to leverage it over strategic materials pose fundamental economic and security risks to Europe that may damage trade between the two or trigger proportionate countermeasures from the EU.<\/p>\n
While Eskelund agreed that China was right to point fingers at other nations for first weaponising export controls, he maintained that this did not justify Beijing following suit.<\/p>\n
\u201cTwo wrongs don\u2019t make a right,\u201d he said. \u201cAnd of course, the same message goes to Europe. We don\u2019t want to race to the bottom.\u201d — SOUTH CHINA MORNING POST<\/p>\n
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