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What is causing the current rare earths crisis?
The rare earths crisis began when China imposed strict export controls on these materials on April 4, 2025, in response to US tariffs. This has led to significant supply chain disruptions, particularly for industries reliant on rare earths, such as automotive and technology sectors.
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How does China's control over rare earths affect global industries?
China's dominance in the rare earths market, controlling 90% of the global supply, has severe implications for industries worldwide. The automotive sector, for instance, is facing production delays due to shortages, as highlighted by EU officials and industry leaders.
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What are the potential solutions to this crisis?
Potential solutions to the rare earths crisis include increasing domestic production in the US and Europe, diversifying supply chains, and seeking alternative materials. Additionally, there are calls for more export licenses from China to alleviate immediate shortages.
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How are US and European industries responding?
US and European industries are responding to the rare earths crisis by urging their governments to negotiate with China for more export licenses. The EU Trade Commissioner has emphasized the urgency of addressing the situation to prevent significant production delays in critical sectors.
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What industries are most affected by the rare earths shortage?
The automotive and technology sectors are among the most affected by the rare earths shortage. Companies in these industries are reporting production halts and delays due to the lack of necessary materials, prompting urgent calls for action from industry leaders and government officials.
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What recent discussions have taken place regarding rare earths?
Recent discussions between President Trump and Xi Jinping have focused on the rare earths crisis, but no concrete decisions were made regarding China's export licensing requirements. This lack of resolution has heightened concerns among industries reliant on these materials.