Auto Industry Faces Crisis Over Rare Earth Shortages Amidst China Trade Tensions

As China tightens its grip on rare earth exports, automotive industries worldwide are feeling the pressure. Key players like BMW have reported supply chain disruptions, signaling a potential crisis in the sector. The manufacturing setbacks stem from Beijing's export restrictions that control 90% of the world's rare earths.

The move by China is viewed as a strategic tool in its trade war with the U.S., putting sectors like automaking, aerospace, and semiconductors at risk. Industry groups like Europe's CLEPA warn of production halts, as only a fraction of export licenses have been granted, exacerbating the shortage.

With no swift resolution in sight, global automakers are lobbying for government intervention while exploring alternative sources and developing new technologies to reduce dependency on Chinese materials. The unfolding situation underscores the fragility of international supply chains amid geopolitical tensions.

(With inputs from agencies.)