China extends rare earth truce to the EU and eases chip exports after the Nexperia case

The Chinese government has confirmed that it will apply the same to the European Union temporary suspension of restrictions on rare earth exports that it negotiated with the Trump administration in the United States. This decision represents a significant, albeit partial, easing of the growing trade tensions between Beijing and Brussels.

 

The measure implies a one-year suspension of the restrictions imposed last April on critical minerals such as dysprosium, neodymium, and terbiumThese elements are fundamental for strategic European sectors, especially the automotive and electronics industries. Thanks to this reprieve, European companies will be able to obtain export licenses more quickly.

 

The European Commission has welcomed the suspension as an "appropriate step" to stabilize the global supply of these materials, although it has noted that it is a temporary measure. temporary and conditional on future negotiations. This relief for the EU contrasts with the situation of companies in The United States, Taiwan, and South Korea, which continue to be under a strict control regime by China.

 

Easing of restrictions after the Nexperia case

 

In parallel to the minerals agreement, China has also announced a flexibility in chip exports and semiconductors to the European market.

 

This decision comes as a direct response to the Nexperia caseBeijing had blocked the re-export of chips manufactured by this company, which is Chinese-owned but based in the Netherlands, after the Dutch government intervened in the company citing national security reasons.

 

Following international talks, the Chinese government has indicated that it will evaluate granting exemptions to certain European companies, allowing the flow of components that meet specific criteria, although the details of these conditions have not been made public. The objective is clear: avoid disruption of supply chains vital for the European technology and automotive industry.

 

The terms of the original agreement with the U.S.

 

The pact, which now extends to the EU and was originally signed between China and the United States, consists of a 12 month suspension of additional controls on critical minerals, including rare earths, gallium, germanium, antimony and graphite.

 

Although this allows companies to obtain general licenses, It does not eliminate bureaucracyThey must continue to request permits and justifying the end uses of the materials to the Chinese Ministry of Commerce. In this way, Beijing maintains monitoring and veto power over the destination of the products, especially in sensitive applications such as defense or advanced semiconductors.

 

In return for the agreement with Washington, the US committed to pausing the imposition of new tariffs and extending tariff exemptions. Section 301 until November 2026.

 

A diplomatic tool

 

These selective relief measures demonstrate China's strategy of using its technology and mineral exports as a diplomatic pressure toolBy prioritizing the European Union in this relaxation of controls, Beijing seeks to maintain a degree of "goodwill" with Brussels and minimize the immediate economic impact of the tensions, all within a context of strong technological and commercial rivalry with Washington.