By Lewis Jackson and Nora Eckert
Dec 10 – Chinese rare-earth magnet suppliers to U.S. automaker Ford Motor were included in the first batch of new export licences issued by Beijing to boost shipments and reduce shortages of the vital components, the carmaker said on Wednesday.
The so-called general licences were agreed after Presidents Xi Jinping and Donald Trump met in South Korea and will reportedly allow larger shipments with fewer hurdles under year-long permits for individual customers.
China’s introduction of rare-earth export controls in April forced companies to apply for licences for every shipment, creating shortages that brought parts of the auto supply chain to a halt and handed Beijing enormous leverage in trade talks with Washington.
Reuters reported last week that three Chinese magnet suppliers had licences issued, but Ford appears to be the first foreign customer to acknowledge that suppliers have received approvals under the streamlined system.
China has said little publicly about the new licences, how they will work or who will receive them, raising fears among non-U.S. diplomats and producers that the licences will be for U.S. customers primarily.
Those concerns were heightened this week when Germany’s Foreign Minister Johann Wadephul said that the country’s automakers were not included in this first round. Many of those manufacturers, such as Volkswagen, have had ties with China for many years.
Wadephul said that “quite a lot of work” was still needed to persuade Beijing to grant the new licences to German companies.
While the system agreed between Xi and Trump should accelerate exports for some customers, it remains to be seen how widely Beijing will issue licences and whether customers in more sensitive sectors such as aerospace or semiconductors will qualify. China’s rare-earth exports jumped in November.
“While we are pleased that some of our suppliers have secured these approvals, we urge the U.S. and Chinese governments to continue their collaboration to fully resolve supply chain issues,” Ford said in its statement to Reuters.
(Reporting by Lewis Jackson and Nora EckertEditing by Mike Colias and David Goodman)