Potential Severe Impacts Anticipated from Chinese Supply Restrictions According to DIHK
BERLIN – Germany's industrial sector is voicing apprehension over China's ongoing restrictions on the export of rare earth minerals. According to Stefan Steinicke, a raw materials expert at the Federation of German Industries (BDI), the current approval backlog for export licenses is causing a ripple effect on supply chains.
Steinicke, speaking to Funke media group newspapers, explained that China's move to require all export licenses for certain rare earth materials to be newly approved has led to a de facto temporary export halt, and this decline in approvals is still impacting supply chains today.
Recent trade disputes and export controls, coupled with China's April 2025 implementation of stricter export controls, have generated alarm in industries across Europe. These industries, including Germany's automotive and manufacturing sectors, are particularly vulnerable due to their reliance on rare earths for critical components like permanent magnets, which are utilized in electric vehicles (EVs).
China's export restrictions have led to a 16% decline in rare earth exports from March to April 2025, reaching 4,785 tonnes in April.
In light of these developments, industry leaders in Germany have expressed concerns about potential disruptions to production due to the slow pace of export license approvals from China. The automotive sector, including suppliers like those for Volkswagen, is among those facing challenges due to China's export controls and the crucial role of rare earths in EV manufacturing.
The overall effect of these export controls and geopolitical tensions has cast uncertainty over industries in Germany that depend on rare earths, particularly in the EV sector.
[1] "China's rare earth exports impacted by trade disputes and export controls," (Source)[2] "EV sector grapples with impact of China's rare earth export restrictions," (Source)[3] "China imposes new export controls on rare earth materials," (Source)[4] "China's rare earth exports decline by 16% in April 2025," (Source)
[1] "The Federation of German Industries (BDI) has voiced concerns about the potential disruptions to the industrial sector, particularly in the automotive and manufacturing industries, due to China's ongoing restrictions on the export of rare earth minerals."
[2] "These apprehensions stem from the unpredictable nature of supply chains, as the slow pace of export license approvals from China could potentially imperil the finance sector, given its interconnectedness with industrial sectors."
