China's Rare Earth Export Ban Freezes Global Car Production Overnight

- China bans heavy rare earth exports on April 4, 2025 - Global auto production disrupted, underscoring China's market dominance On April 4, 2025, China banned the export of heavy rare earth elements, triggering a significant disruption in global automotive manufacturing. These 17 critical minerals are vital for vehicle production, including traditional gasoline-powered cars and electric vehicles (EVs). On April 5, Cryptopolitan reported that this restriction has nearly paralyzed car production worldwide. China accounts for 70% of global rare earth mining and 90% of processing, holding an effective monopoly on heavy rare earth refining. These materials are indispensable for car motors, catalytic converters, electrical systems, and EV batteries. On April 6, Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, said in an interview with Reuters, “You are not going to manufacture a car without rare earths.” The abrupt move caught the automotive sector unprepared. On April 7, Dan Hearsch, managing director at AlixPartners, said in a statement to Bloomberg, “It came out of nowhere. Nobody had any time to react to it.” As a result, automakers worldwide felt the effects immediately, as Ford halted its Explorer SUV production line and European manufacturers shut down their operations. In response, the Chinese government reportedly began granting selective export permissions to certain parts suppliers. Meanwhile, the United States reached an agreement with China to expedite the delivery of some rare earth elements and magnets, although the full details of this arrangement remain undisclosed. In her April 6 interview, Baskaran cautioned that volatile U.S.-China relations raise concerns about the agreement's stability. “A coordinated 'anchor market' among Western allies could help counter China's dominance,” she suggested. As manufacturers scramble for solutions, they are working to develop initiatives like recycling rare earths and creating new technologies to reduce dependence on them. However, these measures are still years away from widespread implementation. In his April 7 statement, Hearsch highlighted the crisis's broader implications, stating, “Today it’s rare earths. But tomorrow it can and will be something else.”