China Starts Issuing Export Licences for Rare Earth Elements to EU Firms: Report

According to the China-based English newspaper which cited European Union sources, China has started issuing export licences to European companies for rare earth metals and magnets. This move is seen as a major blow to the United States, as former President Donald Trump had been making extensive efforts over the past several months to secure such licenses from China.

For the past few weeks, European governments and companies have also been lobbying China to ease export restrictions. These restrictions were originally imposed by China in retaliation against the tariffs levied by the Trump administration. Alongside the U.S., European countries were also impacted by these Chinese export controls.

What China's Ministry of Commerce Had to Say

The Ministry of Commerce in China announced on Thursday that it was "accelerating the approval of rare earth export licenses for EU firms in accordance with the law." A representative for the Ministry of Commerce said, "China is ready to strengthen communication with relevant countries on export controls and to actively promote trade that is convenient and mutually beneficial."

Although EU sources mentioned that no special "green channel" has been created between China and the EU, they did observe that Chinese authorities have begun granting export licences to European countries and companies.

A Strategic Move Before the Upcoming China-EU Summit

Next month, a summit is scheduled between leaders from China and the European Union, where President Xi Jinping, Foreign Minister Wang Yi, and senior EU officials will meet. China's move to resume the licensing process is being seen as an effort to ease tensions between the two sides. The EU believes it is caught in the middle of a trade and technology war between two superpowers and needs a lasting solution to avoid becoming collateral damage.

Europe Caught in the Crossfire of U.S.-China Trade War

Speaking at a webinar on Thursday, Eva Valle Lagares, the EU’s trade chief for China, made strong remarks. She said it was "unclear" whether Beijing had "killed the chickens to scare the monkeys", referring to the proverb used to imply punishing one to set an example for others. Her comments pointed directly at the U.S.-China trade war, which has severely impacted Europe. The EU has faced additional pressure due to tariffs imposed by the Trump administration.