EditChina’s rare earths pivot: a step toward EU rapprochement amid Trump’s trade wars?
Beijing’s concessions may be tactical, aimed at dividing the West as it faces U.S. tariffs and EU scrutiny
In a move signalling potential détente in its strained relationship with the European Union, China announced on Saturday (7 June) it would accelerate approvals for rare earth exports to EU firms and resolve its trade investigation into EU brandy imports by 5 July.
The Chinese Commerce Ministry also noted that price commitment talks on Chinese electric vehicles (EVs) exported to the EU are nearing conclusion, though further efforts are needed.
These developments, discussed during a Tuesday meeting in Paris between Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Maros Sefcovic, suggest a thaw in China-EU relations at a time when U.S. President Donald Trump’s renewed trade wars loom large. But does this mark a genuine rapprochement, or is it a tactical maneuver in a broader geopolitical chess game?
Olive branch after a turbulent year?
The announcements follow a turbulent year for China-EU trade. China’s April 2025 suspension of rare earths and magnet exports disrupted global supply chains critical to automakers, aerospace, semiconductors, and defence industries. The EU, heavily reliant on China’s near-monopoly over these minerals – essential for EV batteries, wind turbines, and high-tech weaponry – faced economic and strategic vulnerabilities. Beijing’s decision to establish a “green channel” for expedited approvals of rare earth exports to qualified EU firms addresses these concerns, signalling a willingness to ease tensions.
A separate ministry statement emphasised China’s recognition of rising demand in sectors like robotics and EVs, pledging stronger dialogue with relevant countries on export controls.
This shift comes as Trump’s aggressive trade policies, including blanket tariffs of up to 25% on EU goods announced in early 2025, have heightened pressure on Brussels to secure stable supply chains and markets. China’s concessions on rare earths and brandy – coupled with progress on EV price commitments – could be interpreted as an olive branch, fostering closer economic ties to counterbalance U.S. protectionism. However, the motivations and longevity of this apparent rapprochement warrant scrutiny.
China’s rare earths strategy is a case in point. Controlling over 80% of global supply, Beijing has wielded these minerals as a geopolitical tool, as seen in its 2010 export restrictions against Japan. The April suspension, widely viewed as retaliation for EU tariffs on Chinese EVs, underscored this leverage. By now offering to streamline exports, China may be seeking to stabilize relations with a key market while maintaining control over critical resources.
The “green channel” promise, however, lacks specifics on scope or implementation, raising doubts about its impact. EU firms, wary of bureaucratic hurdles and potential strings attached, may find the gesture more symbolic than substantive unless concrete timelines and quotas emerge.
Brandy reconciliation?
The brandy dispute further illustrates the tit-for-tat nature of China-EU trade. China’s anti-dumping duties of up to 39% on European brandy, imposed days after the EU’s 2024 EV tariffs, hit French cognac brands like Hennessy and Martell hard, costing the industry millions. France, a vocal supporter of EU tariffs, accused Beijing of “pure retaliation.” The extension of the brandy investigation deadline to 5 July, alongside agreements on price commitments with French firms, suggests a de-escalation. Yet, this resolution may reflect pragmatic self-interest: China’s domestic market values European luxury goods, and prolonged duties risk alienating a lucrative consumer base.
The EV talks, entering their “final stage,” are the most significant test of China-EU cooperation. The EU’s 2024 tariffs aimed to protect its automotive sector from subsidised Chinese EVs, but both sides now explore minimum pricing as an alternative. This compromise could stabilise trade while addressing EU concerns about market flooding.
However, China’s call for the EU to “meet us halfway” and facilitate high-tech trade hints at demands for concessions, possibly relaxed export controls on sensitive technologies. The EU’s proposal of “new technical paths” for EVs, under review by Beijing, adds complexity, potentially involving joint standards or production agreements.
These developments unfold against the backdrop of Trump’s trade wars, which threaten EU exports and global supply chains. A China-EU rapprochement could mitigate these pressures, securing critical inputs like rare earths and preserving market access. Yet, scepticism persists. China’s concessions may be tactical, aimed at dividing the West as it faces U.S. tariffs and EU scrutiny. The EU, meanwhile, tries to balance economic pragmatism with strategic autonomy, wary of over-reliance on China. Domestic pressures, particularly from France and Germany’s automotive sectors, further complicate Brussels’ stance.
With Reuters, edited by g.g.
Caption: A file photo dated 7 July 2005 showing an earth digger dumping dirt on to a large truck at the Antaibao open-air coal mine near Shuozhou, Shanxi Province, China. [EPA/EFE/QILAI SHEN]
Updated: June 9, 2025 - 05:59
