Reuters: G7 Considers Setting Price Floors for Rare Earth Metals to Counter China's Dominance

Reuters cited four informed sources, saying that G7 countries and the EU are considering setting price floors for rare earth elements and imposing tariffs on certain Chinese exports to encourage rare earth production and stimulate investment.

Rare earth elements are difficult-to-extract metal elements, but they are essential for manufacturing products including mobile phones, cars, and high-tech weapons.

As the world's largest producer of rare earth elements, China unexpectedly imposed restrictions on the export of related materials and magnets in April this year in response to additional tariffs imposed by the United States.

After European car manufacturers faced difficulties, China agreed to provide fast-track approval licenses for European companies in May and "updated" its export mechanism for the EU in July.

However, two months later, European companies said that increasing license bottlenecks were threatening to bring new losses.

Except for Japan, G7 countries are highly or completely dependent on China for a variety of materials, from rare earth magnets to metals needed for batteries.

Action Plan to Address Risks

To address these risks, G7 leaders launched a critical minerals action plan in June this year, and a technical team held a meeting in Chicago earlier this month.

A source talking about the Chicago meeting said, "The core of the discussion was whether to adjust foreign investment regulations for critical materials to prevent these companies from moving toward China."

Two sources mentioned that the group discussed imposing some form of carbon tax or tariff based on the proportion of non-renewable energy used in the production process of Chinese rare earth elements and small metals.

A U.S. government official told Reuters on Wednesday that the U.S. is negotiating with G7 and EU leaders on broader trade measures to prevent dumping of rare earth material prices, which include tariffs, setting price floors, or other measures.

Sources said officials are studying setting a government-supported price floor, which is a practice recently taken by the U.S. to encourage domestic production.

Source: Reuters

Original: www.toutiao.com/article/1844278625862027/

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