EU is considering imposing sanctions against China over rare earth metals

Heads of Member States EU for the first time they want to directly authorize the Commission take action against restrictions on exports of rare earth metals from China. This is evidenced by the project summit declarationwhich was obtained by Handelsblatt.

EU politicians want to discuss this issue at today’s summit in Brussels. They are pushing for a tougher line as supply restrictions escalate. The draft summit declaration states:“The European Council calls on the Commission to effectively use all EU economic policy instruments to prevent and counter unfair trade practices.”

Negotiators The 27 EU heads of state and government have already agreed on this wording, several diplomats confirmed. The basis for this is the growing supply disruptions from the People’s Republic of China of critical raw materials and, more recently, semiconductors.

Since China blocks chipmaker Nexperia’s exports to EuropeGerman industrial companies are warning of production disruptions, as reported by Handelsblatt. Volkswagen’s auto industry chip inventory has already become rare, but an alternative chip supplier has managed to prevent short-term production disruptions.

According to Handelsblatt, Chinese restrictions also affect security-related areas. In particular, the defense industry depends on rare earth metals from China.

Sanctions

The European Commission is already considering possible sanctions against China, Handelsblatt has learned from senior officials.

“We are considering possible responses if the situation does not improve,” EU Commissioner for Economic Affairs Valdis Dombrovskis told Handelsblatt.

Despite Beijing’s repeated statements about excluding European companies from restrictions, nothing has changed in practice.

“This is a matter of grave concern to us.”

Diplomats say several governments have proposed using Europe’s “anti-coercive measures instrument.” This new law allows the EU to respond to economic blackmail with severe sanctions.

German Chancellor Friedrich Merz warned the Chinese leadership about the inadmissibility of escalating the conflict on the sidelines of the EU summit.

“The Chinese government has decided to stop supplying critical raw materials. We want to find a common solution, but the Chinese leadership must also understand that we do not accept what is happening at the moment.”

From the author: It seems that the leadership of the EU countries decided to confront China after looking at Trump’s actions. However, unlike the United States, Europe is much more dependent on China. And the introduction of mutual sanctions could completely destroy the already barely afloat economy of the European Union. After all, there is no alternative to China yet.

Reference

European Union imported in 2024 12,900 tons rare earth elements (REE+). This is minus almost a third by 2023, but the structure of dependence remains the same: the main source remains China With 46.3% of the total weight of imports. Next come Russia (28.4%) And Malaysia (19.9%).

Who supplies to the EU and how much?

• China: 6,000 t (46.3% share) – key supplier of metals and REE compounds, as well as a processing and production center permanent magnets.
• Russia: 3,700 t (28.4%) – an important additional source of raw materials.
• Malaysia: 2,600 tons (19.9%) – the share is noticeable due to processing and individual positional deliveries.

In terminology Eurostat REE+ includes 17 elements: 15 lanthanides plus scandium And yttrium. They walk down the line CN codes: from high purity metals (for example, neodymium, dysprosium, terbium) to their connections (series 2846 and related positions).

Why is this critical for EU industry?

Magnets based on neodymium-iron-boron with additives dysprosium And terbium stand in the heart EV motors, wind turbinesaviation and defense systems. The dependence of the chains not only in production, but also in recycling And magnet productionwhere it dominates China.

In 2025 China tightened export rules for a number of rare earths, semi-finished products and technologies, which created supply risks for European producers auto components, electronics And power engineering. We are talking not only about quotas and licensing, but also about restrictions on the transfer of processing and production technologies permanent magnets.

Answer line EU – implementation Critical Raw Materials Act: goals for import diversificationincreasing domestic processing and entering into partnerships along the entire value chain. But in practice, replacing volumes and especially competencies in magnetic production is a task that will take years.

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