David Shepardson and Michael Martina
WASHINGTON (Reuters) - Global auto executives are alerting China’s rare earth magnet shortage – from windshield window motors to anti-lock brake sensors, all can force car factories to close within weeks.
In a previously unreported letter to Trump administration officials, the head of trading groups representing General Motors, Toyota, Volkswagen, Hyundai and other major automakers, raised urgent questions.
Without reliable access to these elements and magnets, automotive suppliers will not be able to generate critical automotive components including automatic transmissions, throttles, alternators, various motors, various motors, sensors, seat belts, speakers, speakers, lights, electric lights, motors, power steering and cameras,” Automot Innovation Automot Innovation.
The letter was also signed by the Vehicle Supplier Association Mema, adding that without those essential automotive components, it would be a matter of time for U.S. vehicle factories to be interrupted.
"In severe cases, this may include the need to reduce production and even the need to close the vehicle assembly line," the groups said.
The situation has not been resolved and remains worrying, league chief executives John Bozzella and Bill Long, Bill Long, told Reuters on Friday. They expressed their gratitude to the Trump administration for its senior involvement to prevent disruption of U.S. automobile production and supply chains.
Bozzella pointed out that the car issue was on the agenda during Secretary of State Scott Bessent during a speech by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer earlier this month.
Greer told CNBC on Friday that China has agreed to lift export restrictions on exports of rare earth magnets to U.S. companies and that movement is insufficient to allow access to key U.S. industries. “We haven’t had the flow of those critical minerals like we should have done.”
China (China) controls over 90% of the global handling capacity of all magnets, from cars and fighter jets to home appliances - imposed restrictions in early April, requiring exporters to obtain licenses from Beijing.
Exports of rare magnets from China were cut in half in April as companies struggled to handle opaque application procedures to obtain permissions that sometimes require hundreds of pages of documents.
In a social media post on Friday, President Donald Trump accused China of violating a deal reached this month to temporarily call tariffs and other trade restrictions.
"China may not be surprising, it completely violates our consent," Trump said in an article on his Truth Social Platform.
China's embassy in Washington said it was the United States that was abused by the semiconductor sector's export controls.
A U.S. official who knows the negotiations told Reuters that only tariffs and China's non-tariff countermeasures were covered in the Geneva talks, and U.S. export controls were not part of the deal.
The official also expressed frustration that Beijing appears to be slowly issuing rare earth export licenses that could kick out Washington's export control retaliation if automakers are vulnerable to damage from mineral shortages.
While a few licenses have been granted, including some Volkswagen suppliers, Indian automakers say they still haven't received any licenses and will have to stop production in early June.
German auto parts maker Bosch said this week that its suppliers have been caught in receiving export licenses by China's even more unfavorable procedures.
A Bosch spokesperson described the process as “complex and time-consuming, partly due to the need to collect and provide a lot of information.”
(Reported by David Shepardson and Michael Martina; Editors of Mike Colias, Kevin Krolicki and Sandra Maler)