China has granted temporary export licenses to rare land suppliers of the three main American cars makers, according to two sources familiar with the matter, as interruptions in the supply chain begin to leave Beijing’s export strips in these materials.
At least some of the licenses are valid for six months, according to the two sources, which were not named because the information is not public.
It was not immediately clear how much or items are covered by approval or if the movement indicates that China is preparing to relieve the rare land license process, which industry groups say it is heavy and has created a supply bottleneck.
On Thursday, President Trump and Chinese President Xi Jinping had a long telephone call for commercial differences.
Trump said in the social media that “there should no longer be a question that respects the complexity of the products of the rare land.”
The two parties said that the teams will meet again soon.
China’s decision in April to restrict exports from a wide range of rare and related magnets has reduced the power chains for automobile manufacturers, aerospace manufacturers, semiconductor companies and military contractors around the world.
The dominance of critical mineral industry, which is key to green energy transition, is becoming more and more considered as a key point of leverage for Beijing in its trade war with the United States.
China produces about 90% of the rare lands of the world and representatives of the car industry have warned that threats to production are growing due to their dependence on these parts.
Providers of three major American automobile manufacturers, General Motors, Ford and Jeep-Maker Stellalantis obtained an authority for some rare land export licenses on Monday, said one of the two sources.
GM and Ford refused to comment. Stellalantis said he is working with suppliers “to ensure an efficient license process” and that so far the company has been able to “address immediate production concerns without great interruptions.”
The China Ministry of Commerce did not respond immediately to a fax comments request.
China’s critical export controls have focused on Trump’s criticism of Beijing, which he has, according to him, has violated the truce reached last month to retreat for commercial rates and restrictions.
North -American automobile companies already feel the impact of restrictions.
Ford closed the production of his SUV Explorer on his Chicago plant for a week in May due to a shortage of rare lands, the company said.
Automobile providers’ approval follows a green light granted to the suppliers of an American electronics company last week and another issued earlier this week to suppliers of an American non-automatic company, said the first person, who refused to appoint companies.
“We need to give the Chinese the benefit of the doubt they are working on. It is up to them to prove that they are not,” the person said.
Reuters reported on Wednesday that China has introduced a monitoring system for its rare land magnets sector in a movement to improve its control over the sector and the repression of smuggling.
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