Amid US-China Trade War, Global Automakers Warn Beijing's Curbs On Rare Earth Metals Could Significantly Impact Production

Automakers worldwide have criticized China's restrictions on rare earth minerals and magnets, which are crucial to automotive production, amid ongoing U.S.-China trade tensions.

What Happened: Automakers from the U.S., Europe, Japan, and India have raised alarms over China's export curbs on raw materials critical to vehicle production, Reuters reported on Tuesday.

Beijing's decision to restrict exports came in as a retaliatory measure to U.S. President Donald Trump's 145% tariffs levied on Chinese goods imported into the country. The ongoing trade tensions have severely disrupted the global economy.

A trade group representing General Motors Co. (NYSE:GM), Toyota Motor Corp (NYSE:TM) and other manufacturers had written to the Trump administration about the threat of China's curbs on exports, the report suggests.

"If the situation is not changed quickly, production delays and even production outages can no longer be ruled out," an expert representing German automakers said in the report.

The report also suggests that a business delegation from Japan will arrive in the country in the coming days to meet with Chinese officials, while officials from the EU are also expected to meet with the Chinese government over the curbs.

Why It Matters: The news comes in as talks between the Trump administration and Beijing have currently hit a stalemate, according to U.S. Treasury Secretary Scott Bessent.

The current escalating tensions follow a temporary 90-day truce in the trade war that was reached following negotiations between the two governments, which sent stocks on the rise.

However, Trump has since accused China of violating the Geneva trade agreement following its decision to impose curbs on the exports. Beijing has called the accusations groundless and has vowed to retaliate.

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