How EU plans to tackle China's rare earth export restrictions
What's the story
European Commission President Ursula von der Leyen has said that the European Union (EU) is considering all possible responses to China's recent restrictions on rare earth exports. Speaking at the Berlin Global Dialogue conference, she highlighted the "significant risk" posed by China's tightened export controls over rare earths and battery materials in recent weeks and months.
Strategic approach
Working with G7 partners
Von der Leyen stressed that the EU's immediate priority is to find solutions through dialogue with China. However, she also emphasized that they are prepared to use all available tools in their arsenal if necessary. The European Commission President also said they would work with G7 partners for a coordinated response to China's actions.
Trade tool
Macron urges use of ACI against China
The comments from von der Leyen come after French President Emmanuel Macron urged EU leaders to consider using the anti-coercion instrument (ACI) against China. The ACI is the bloc's most powerful trade tool, designed as a deterrent and response to deliberate coercive actions from third countries that use trade measures to pressure policy choices of the EU or its members.
Global impact
Impact on Europe
Von der Leyen also noted that China's action on rare earths is part of "wider economic friction" between the US and China. However, she stressed it has a "big impact" on Europe, as 90% of the region's consumption of rare earth magnets are imports from China. The EU is now racing to shield its industries from an influx of subsidized Chinese competition.