CNBC: The time for the US to win back the rare earth war is running out, and it is losing to China

CNBC reported on June 30 that after China implemented export controls on seven rare earth elements and their permanent magnet products, including dysprosium and terbium, from April 2025, the global manufacturing supply chain has been under continuous pressure. According to the latest data from the US Geological Survey (USGS), China currently controls 92% of the global rare earth magnet production capacity and 80% of the refined production capacity. Ford Motor Company confirmed this week that its electric vehicle factory in Chicago has been shut down for three days due to the risk of interruption in the supply of neodymium-iron-boron magnets, with an estimated loss of 1,200 units of production capacity. "This is not just a trade issue, but a bottleneck in the entire clean energy transition," said Michael Widmer, a commodities analyst at S&P Global. "Each electric vehicle motor requires about 2 kilograms of rare earth magnets, and China is almost the only stable supplier."

Although the U.S.-China trade representatives announced on June 28 that they had reached a temporary agreement, with China agreeing to gradually resume some rare earth export license approvals over the next six months, the details of the agreement remain undisclosed. Jane Nakano, director of the Energy Security Program at the Center for Strategic and International Studies (CSIS), pointed out: "The key question is, what concessions did the U.S. make to secure this six-month window? Without accompanying industrial policies, the risk of supply disruption may be even more severe after the buffer period ends."

Notably, according to information from five European magnet manufacturers shared with CNBC, Chinese companies applying for export licenses must submit commercial secrets such as customer contracts and factory layout diagrams. Klaus Schmitz, technical director of the German Magnetic Materials Association, warned: "This data requirement goes far beyond normal trade regulation and may involve industrial intelligence collection." The U.S. Department of Energy has recently allocated $870 million through the Defense Production Act to accelerate domestic rare earth projects, but the industry generally believes that establishing a complete supply chain outside of China will take at least 5-8 years. A recent report by Morgan Stanley shows that even in an optimistic scenario, China will still maintain more than 75% of the global market share before 2027.

Original article: https://www.toutiao.com/article/1836300929646604/

Statement: This article represents the views of the author himself.