WASHINGTON (AP) — Major global automakers have warned the U.S. government that China’s recent export restrictions on rare-earth magnets could force vehicle production shutdowns within weeks, according to a May 9 letter obtained by Reuters.
The letter, sent to Trump administration officials by the Alliance for Automotive Innovation and MEMA, The Vehicle Suppliers Association, raised alarms about access to rare-earth elements critical for making motors, sensors, power steering systems and automatic transmissions.
“Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components,” the groups wrote. “In severe cases, this could include the need for reduced production volumes or even a shutdown of vehicle assembly lines.”
Alliance CEO John Bozzella and MEMA CEO Bill Long told Reuters on Friday that the issue remains unresolved. They thanked the administration for its engagement and said the matter was raised during trade talks in Geneva earlier this month between U.S. and Chinese officials.
U.S. Trade Representative Jamieson Greer said Friday that while China agreed to lift export restrictions, implementation has been too slow. “We haven’t seen the flow of some of those critical minerals as they were supposed to be doing,” Greer told CNBC.
China imposed new licensing requirements on rare-earth magnet exports in April, which halved shipments for the month. Some Volkswagen suppliers have received licenses, but Indian automakers report none and expect production disruptions in early June.
Bosch said its suppliers are experiencing delays due to the complex licensing process, describing it as “complex and time-consuming, partly due to the need to collect and provide a lot of information,” a Bosch spokesperson said.
President Donald Trump said Friday that China had violated trade terms, while a spokesperson for China’s embassy blamed the U.S. for restricting semiconductor exports, exacerbating tensions.
