World

China’s Rare Earths Suspension: How the EU Secures Supply Chains and Eyes Stable Trade

China suspended rare earth export controls for 12 months. EU & China aim for stable supply chains.

November 4, 2025, 4:29 PM

Three blue European Union flags with yellow stars fly in front of the modern, glass-and-steel Berlaymont building.

Multiple European Union flags flying in front of the European Commission headquarters building. By Christophe Licoppe / Shutterstock.com.

Executive Summary

The European Union has welcomed China’s 12-month suspension of export controls on rare earth materials following a meeting between EU and Chinese trade officials.

This development aims to stabilize the flow of critical rare earth materials, essential for high-tech and military products, given Europe’s significant reliance on China for their supply.

The EU and China are actively working towards establishing an export licensing system to ensure a more stable and predictable supply of rare earth minerals to the 27-nation bloc.

The Story So Far

The European Union is heavily dependent on China for rare earth materials, which are essential components for high-tech, military, automotive, and appliance industries. This reliance occurs within a significant bilateral trade relationship, where China is the EU’s second-largest trading partner, making stable supply chains for these critical materials a priority for both economies.

Why This Matters

The 12-month suspension of China’s rare earth export controls, alongside ongoing discussions for a stable licensing system, is a significant move to secure the EU’s access to these critical materials, which are vital for high-tech and military industries. This development aims to stabilize global supply chains and mitigate potential trade tensions in strategically important sectors, reflecting a mutual interest in maintaining predictable economic relations between the EU and its second-largest trading partner.

Who Thinks What?

The European Union welcomed China’s 12-month suspension of export controls on rare earth materials, describing it as an “appropriate and responsible step” and is working with China to establish a stable export licensing system for these critical materials.

China has implemented a 12-month suspension of export controls on rare earth materials and is continuing discussions with the EU on additional trade measures and improving the implementation of export control policies.

Both the EU and China recognize the importance of maintaining stable trade relations for the global economy and share common climate objectives, aiming to ensure predictable global supply chains.

The European Union has welcomed China’s recent 12-month suspension of export controls on rare earth materials, following a meeting between EU trade commissioner Maros Sefcovic and Chinese Commerce Minister Wang Wentao in Brussels. This development aims to stabilize the flow of these critical materials, which are essential for high-tech and military products, amidst Europe’s significant reliance on China for their supply. The discussions on Friday also touched upon European regulations on semiconductor sales.

Stabilizing Critical Material Trade

Olof Gill, a spokesperson for the European Commission, confirmed that the EU and China are working towards an export licensing system. This system is intended to ensure a more stable supply of rare earth minerals to the 27-nation bloc. Gill described China’s suspension of controls as an “appropriate and responsible step” for global trade stability in this critical area.

Europe, like the United States, maintains a substantial trade deficit with China, which amounted to approximately 300 billion euros (USD 345 billion) last year. The continent is heavily dependent on China for rare earth materials and products, which are vital components in magnets used across various industries, including automotive and appliance manufacturing.

EU Trade Commissioner Maros Sefcovic further stated that Brussels and Beijing are continuing discussions on additional trade measures. He emphasized via an X post that “Both sides reaffirmed commitment to continue engagement on improving the implementation of export control policies.”

China stands as the EU’s second-largest trading partner in goods, only surpassed by the United States, with bilateral trade valued at an estimated 2.3 billion euros (USD 2.7 billion) daily. Both entities recognize the importance of maintaining stable trade relations for the global economy and also share common climate objectives.

Looking Ahead

The collaborative effort to establish a stable rare earth trade system underscores the mutual interest of both the EU and China in ensuring predictable global supply chains. This agreement reflects a move towards mitigating trade tensions in strategically important sectors, while maintaining broader economic cooperation.