The European Commission is establishing a cross-departmental emergency task force to prepare for potential disruptions in rare earths supply from China, as current export arrangements are set to expire in October. This proactive measure underscores the EU’s growing concern over strategic dependencies on critical materials essential for manufacturing, including rare earths, chips, and other industrial inputs. China dominates the global rare earths market, supplying 66% of mined and 88% of refined supply, leaving European industries highly vulnerable to any trade restrictions. The task force, which will bring together staff from departments covering industry, trade, financial services, development aid, and the economy, aims to improve the EU’s ability to identify problems early and respond swiftly. Its work will include finding alternative supply sources and potentially deploying EU funding to maintain access to critical materials. The first meeting is expected in September, coinciding with the Commission’s anticipated proposal on supply chain dependencies. This proposal may include an export tax on aluminium scrap to boost domestic recycling, measures to expand rare earth magnet recycling within the EU, and a diversification law requiring companies to reduce reliance on single suppliers for key inputs. The move comes amid broader trade tensions with China, as EU Trade Commissioner Maroš Šefčovič has warned Beijing that the bloc will act unless progress is made in reversing the EU’s €1 billion-a-day trade deficit. The EU’s dependence on Chinese suppliers extends beyond rare earths to semiconductors used in automotive and other sectors, with a recent chip supply squeeze forcing temporary sanctions adjustments. While officials remain hopeful that the current one-year truce on rare earth exports, agreed after a meeting between Chinese President Xi Jinping and U.S. President Donald Trump, will be renewed, the licensing system imposed by China adds uncertainty. The task force represents a strategic shift toward greater resilience and self-sufficiency in critical mineral supply chains, aligning with broader EU efforts to decarbonize industry and secure raw material access.
Source and Credit: tradersunion.com
