By Duygu Alhan
Efforts are intensifying to curb China's dominance in rare earth elements (REEs), which are critical to global technology and defense, with the European Union's next steps under close scrutiny.
Beijing's decision in April to suspend exports of certain REEs and related magnets triggered major disruptions, particularly across Europe's automotive sector. Supply chain constraints have affected several manufacturers, including BMW and Mercedes-Benz.
The move, widely seen as retaliation for US President Donald Trump's April 2 announcement of new tariffs on Chinese goods, sent shockwaves through global supply chains spanning the automotive, aerospace, semiconductor and defense sectors.
While Washington's June 11 declaration of a temporary deal with Beijing on REE supply provided brief market relief, China's entrenched dominance in the sector remains a key strategic vulnerability for Western economies.
- ‘Major transformation of world economy underway’
China is weaponizing its rare earths dominance, and the EU risks falling behind, said Sait Uysal, founder of the Turkish Critical Minerals Initiative, in an interview with Anadolu.
"The new industrial revolution marks a shift in global power and the rise of the East. A major transformation of the world economy is underway," he said.
Uysal noted that the EU is unlikely to secure alternative resources in the short term, citing the bloc’s protracted decision-making processes. He added that the prevailing attitude among EU private sector players is to cooperate with China rather than compete against it.
"The general approach of the private sector in the EU is to cooperate with China rather than compete with it. But in the long run, this could erode the competitiveness of major European companies, paving the way for acquisitions by Chinese firms and deepening China’s global dominance," he said.
Uysal also noted that while the EU lacks a comprehensive strategy to break China's dominance in REEs, it is pursuing measures such as developing alternative sources, reducing resource consumption and investing in alternative technologies.
Emphasizing the need for careful management of relations with China, Uysal said that if this process is handled through conflict and tension, challenging times lie ahead for the global economy.
"Regardless, we will see some major companies disappear due to competition while new players emerge," he added.
- China unlikely to back down on REEs
Caner Zanbak, environmental coordinator at the Turkish Miners Association, said that despite China’s resource advantage, Beijing has experienced setbacks in general commodity exports due to US-imposed tariffs.
For this reason, Zanbak noted that trade talks between the US and China have gained momentum but expressed skepticism that China will back down on the REEs issue.
"Beijing is expected to aggressively market new technology products containing REEs and other critical raw materials to countries worldwide -- potentially employing state-sponsored dumping to keep prices low," he said.
"This strategy will significantly challenge other developed nations competing for these vital resources in the race for global economic dominance," he added.
Zanbak urged the EU to act quickly to diversify rare earth sources, stressing the need to strengthen diplomatic ties and form strategic partnerships -- especially with China and other resource-rich countries -- to develop value-adding mineral facilities.
"The EU is currently pursuing this strategy quietly and intensively. Of course, the presence of global competitors such as the US, Japan and South Korea must also be taken into account," he added.