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China’s rare earth export curbs hit European automotive sector

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Concerns are deepening over the potential damage from China’s restrictions on critical mineral exports, prompting some European automakers to consider measures against shortages of rare earth elements.

In April, China’s decision to suspend exports of a wide array of rare earth elements and associated magnets, reportedly in response to excessive tariffs imposed by US President Trump, disrupted supply chains crucial for automakers, aerospace manufacturers, semiconductor companies, and military contractors globally. This action underscores China’s dominance in the critical mineral industry, which is pivotal for the green energy transition, and is perceived as leverage in its trade dispute with the US. China accounts for approximately 90% of the global production of rare earth elements.

In May, US automaker Ford was compelled to halt production of its Explorer model at its Chicago plant for several days.

European Union Trade Commissioner Maros Sefcovic stated on Wednesday that he and his Chinese counterpart had agreed to clarify the issue of rare earth elements as soon as possible. EU Industry Strategy Commissioner Stephane Sejourne remarked, “We must reduce our dependence on all countries, especially certain nations like China, upon which we are more than 100% reliant.” After Brussels identified 13 new projects aimed at boosting metal and mineral supplies, Sejourne commented, “Export restrictions intensify our desire to diversify.”

Earlier on Wednesday, Mercedes-Benz production chief Joerg Burzer revealed that the automaker is in discussions with its largest suppliers about establishing “buffers,” such as rare earth stockpiles, to safeguard against potential supply threats. Currently, Mercedes is not affected by shortages. BMW reported that while a segment of its supplier network has been affected by shortages, its own manufacturing plants continue to operate normally.

The European automotive suppliers’ association, CLEPA, indicated that several production lines have been shut down due to depleted supplies and issued a warning about the escalating threat these controls pose to production. CLEPA further noted that only a quarter of the hundreds of export license applications submitted by automotive suppliers since early April have been approved, with some applications reportedly rejected by authorities due to “high procedural reasons.” CLEPA, without disclosing the names of the affected companies, warned that further disruptions are possible.

While China’s April announcement coincided with a broader retaliatory package against Washington’s tariffs, these measures are being enforced globally, generating concern among business executives across the world. Last week, German and US automakers voiced complaints, echoing similar concerns from an Indian electric vehicle manufacturer, that China’s imposed restrictions are threatening production. Many are urging their respective governments to find a swift solution and are actively seeking alternative supply sources.

Wolfgang Weber, CEO of Germany’s electrical and digital industry association ZVEI, stated via email that some companies possess supplies sufficient for only a few weeks or months. “Companies currently feel abandoned by policymakers and are, in part, seeking their own solutions to the challenging situation in China,” he remarked.

Swedish company Autoliv, the world’s largest manufacturer of airbags and seatbelts, announced that its operations remain unaffected. However, CEO Mikael Bratt mentioned that he has established a task force to manage the evolving situation.

Reports indicate that unconventional strategies are being explored in the US to secure urgently needed rare earth elements, or at least components derived from them. Consequently, automakers, in particular, are contemplating shifting the production of relevant components to China. Some are even considering sending nearly finished parts, such as electric motors, to China for the installation of indispensable rare earth magnets, with these components subsequently being shipped back to Western countries.

Dependence on China

Automakers such as General Motors and BMW, along with major suppliers like ZF and BorgWarner, are actively researching or developing motors with low or zero rare earth content to lessen their dependence on China. However, few have successfully scaled production to achieve cost reductions. BMW has begun incorporating magnet-free electric motors into its latest generation of electric vehicles. Nevertheless, the company still requires rare earths for smaller motors that power components such as windshield wipers and window regulators. German automaker Volkswagen has stated that it currently perceives no shortages.

China’s tightening of critical mineral export controls, following the initiation of a trade dispute by the US, has become a central theme in Trump’s criticisms of Beijing. Trump has sought to redefine trade relations with the US’s largest economic competitor by imposing substantial tariffs on billions of dollars worth of imported goods, aiming to reduce the trade deficit and recover lost manufacturing jobs. Trump imposed tariffs of up to 145% on Chinese goods, but subsequently retracted them following a significant sell-off in stock, bond, and currency markets, which was attributed to the broad scope of these tariffs. China retaliated with its own tariffs and is leveraging its dominance in crucial supply chains to pressure Trump into retreating.

The US President asserts that China violated a ceasefire agreement, reached in Geneva last month, which stipulated the rollback of tariffs and trade restrictions. Beijing, in turn, accuses Washington of breaching the agreement. The Trump administration further escalated the conflict with actions that Beijing described as “excessive pressure measures.” These included threatening to cancel visas for Chinese students in the US and halting the sale to China of certain key technologies related to jet engine semiconductor design.

Trump and Chinese President Xi Jinping are anticipated to meet this week. It is expected that the two leaders will attempt to resolve their differences, with export restrictions anticipated to be a prominent item on the agenda. In a social media post on Wednesday, Trump underscored the fragility of any potential agreement, stating that Xi was “VERY TOUGH AND VERY HARD TO MAKE A DEAL WITH.”

Another option: Ending the economic war

Alternatively, ending the economic conflict with China could offer a resolution. If North American and European nations were to lift their export restrictions targeting China, they might anticipate an exemption from Chinese countermeasures, which were implemented in response to the West’s economic pressure. However, such a move is not anticipated under current circumstances.

Industry representatives suggest that the EU could also act independently, without consulting the US. For instance, it could lift the ban on the export to China of cutting-edge machinery used in semiconductor production, manufactured by the Dutch company ASML. Such an action would alleviate tensions in the ongoing economic conflict. Nevertheless, there are currently no indications that such a step will be taken within the EU.

Diplomacy

South Korea pulls part of embassy staff from Ukraine amid POW dispute

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The South Korean government has decided to withdraw part of its embassy staff from Ukraine.

According to the Yonhap news agency, Foreign Ministry spokesman Park Doo-sun cited the Kyiv administration’s failure to take “positive steps” in the dispute that began with the leak of information concerning the handover of North Korean prisoners of war as the justification for the move.

The spokesman also listed the ongoing threat of air strikes, which complicates the safety of diplomats, among the reasons.

Following the withdrawal of part of the personnel, essential diplomatic contacts will continue under the leadership of the charge d’affaires ad interim to Ukraine. All consular staff tasked with protecting South Korean citizens will remain in Ukraine.

Prior to this move, the Seoul administration decided on 8 October to withdraw its ambassador. The Foreign Ministry stated at the time that it was ready to continue consultations with Kyiv to resolve the emerging issues constructively.

Tensions between the two countries began with a speech delivered by Ukrainian President Volodymyr Zelenskyy at the United Nations General Assembly in September.

Zelenskyy announced that two captured soldiers from the North Korean army had been handed over to South Korea.

South Korean President Lee Jae-myung, meanwhile, accused Kyiv of breaching a confidentiality agreement.

Lee said the disclosure of this information endangered the prisoners’ families and stability on the Korean Peninsula.

Seoul expects a public apology

Dmytro Lytvyn, an adviser to the Ukrainian president, denied the existence of a confidentiality agreement.

The South Korean Foreign Ministry summoned Ukrainian Charge d’Affaires Andriy Veshkin on 28 September and issued a note of protest against Lytvyn’s remarks.

President Lee Jae-myung warned in a statement on 2 October that they would take additional measures against Kyiv if Ukrainian authorities did not acknowledge the agreement and make a public apology. Lee stated that Ukraine itself had initially requested that the transfer of the prisoners be kept confidential.

Ukrainian Foreign Ministry spokesman Heorhii Tykhyi said the dispute stemmed from differing interpretations of the confidentiality regime.

Tykhyi noted that Seoul, based on its constitution which recognises the entire Korean Peninsula as its own territory, requested that the prisoners be handed over “like its own citizens”.

Describing the handover as a “gesture of goodwill”, Tykhyi stated that they were conducting closed-door negotiations to resolve differences of opinion.

Ambassador Park Ki-chang returned to Seoul on 10 October. According to a report by The Korea Times newspaper citing the ministry, recalling the ambassador served as a diplomatic protest against the leak of information regarding the prisoners.

The newspaper wrote that South Korea had last taken a similar step in 2008 by withdrawing its ambassador to Japan.

Moscow warned foreign diplomats

On 3 October, the Russian Foreign Ministry reiterated its warning to foreign nationals, including diplomatic mission staff, against remaining in Ukraine.

The ministry recalled its advice to leave Kyiv, citing ongoing strikes against military targets.

The ministry noted that those who failed to heed the warnings would bear responsibility for the potential consequences.

Kremlin spokesman Dmitry Peskov said in a statement on 24 September that they had no information regarding Kyiv handing over two North Korean prisoners of war to Seoul.

Peskov, noting that prisoner matters fall under the authority of the Defence Ministry and intelligence services, said, “Contacts through the special services are continuing.”

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Ex-BND head Hanning tied to former Mossad chief amid spy inquiry

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August Hanning, who led Germany’s Federal Intelligence Service (BND) between 1998 and 2005, was arrested on 6 October on allegations that he obtained roughly 2,000 classified agency documents and used them during contacts with intelligence officers from a foreign state.

Accused of high treason and espionage on behalf of a foreign intelligence agency, the former spy chief is alleged to have procured the documents from former BND employee Manfred D.

Prosecutors stated that the leaked records included internal briefing notes presented to senior German officials, though the Berlin government has not yet publicly disclosed which country received the classified data.

According to an exclusive report by Jake Green for The Cradle, seized email exchanges revealed extensive ties between the arrested Hanning and former Mossad director Danny Yatom.

The correspondence shows that the two former intelligence directors built an ongoing network of contacts following their public service, combining commercial ventures, efforts to secure political influence, and intelligence links.

This dynamic has triggered debate that using personal connections and official access for private gain has left Germany’s intelligence apparatus vulnerable.

Intelligence notes for 10,000 euros and campaign proposals

According to the reviewed emails, Hanning told Yatom in a 2018 message that he could prepare an “overall assessment based on information obtained from senior German officials and intelligence agencies” concerning an unidentified candidate.

The former BND head committed to completing the report by 13 July in exchange for 10,000 euros.

Contacts between the two men subsequently expanded to cover domestic political processes in Germany. Ahead of the September 2021 federal election, Yatom asked Hanning to approach leading candidates.

Describing CIY Global as a “political campaign company”, the former Mossad chief noted that he aimed to introduce its capabilities to German politicians, and he mentioned his intention in the same exchange to transfer documents concerning a cybersecurity firm.

Cybersecurity partnership and surveillance operations across Europe

The partnership between Yatom and Hanning reached beyond political lobbying initiatives into the cybersecurity sector.

Hanning reportedly served as a consultant for World Health Energy Holdings, a cybersecurity company linked to Yatom.

Firms of this type, established or managed by former intelligence personnel, provide commercial platforms on the international market for Israeli-origin surveillance, cyber intelligence, and political influence capabilities.

The operational presence of private Israeli-based surveillance technologies across Europe has recently entered judicial records through scandals in Poland, Spain, and Greece.

Polish prosecutors announced on 12 October that data collected under the previous government via Pegasus spyware against political opponents had been transferred out of the country, adding that manufacturer NSO Group maintained access to the technical infrastructure.

In Spain, the 2022 CatalanGate investigation established that at least 65 people, including politicians, lawyers, and civil society representatives, were targeted using Pegasus or Candiru software, with Citizen Lab researchers publishing strong evidence linking the operation to Spanish authorities.

In Greece, the surveillance operation targeting journalist Thanasis Koukakis and Member of the European Parliament Nikos Androulakis was determined to have used Predator software, linked to Intellexa, a company founded by former Israeli intelligence officer Tal Dilian.

In the German espionage investigation, the traffic between Hanning and Yatom involving paid reporting, contacts with electoral candidates, and commercial partnerships does not yet provide conclusive legal evidence regarding the final destination of the roughly 2,000 classified documents.

Nevertheless, the disclosed correspondence gives German investigators a concrete line of inquiry to assess whether classified state secrets reached commercial networks tied to Israeli intelligence.

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Trump dismisses US envoy to Greece Kimberly Guilfoyle

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US President Donald Trump has dismissed Kimberly Guilfoyle, the US ambassador in Athens, following serious press reports concerning her conduct.

White House Press Secretary Katie Zacharia told reporters during her first briefing that Guilfoyle had been asked to resign.

“She was doing a good job, but we didn’t like what we read in the press,” Trump said. “She was not a member of my family. I think she dated my son a long time ago.”

In a social media post, Guilfoyle stated: “These claims are unfounded, and I will resolutely defend my name, reputation, and integrity.” She added that she was particularly proud of the embassy’s work.

According to Kathimerini, her removal came as no surprise in Washington. Days of successive disclosures and vigorous exploitation of the matter by Democrats had been inflicting political damage on the White House ahead of the sensitive midterm elections.

The US State Department was instructed not to comment, with crisis management transferred entirely to the White House.

Reports indicate that most of the president’s team swiftly favoured Guilfoyle’s dismissal, while Secretary of State Marco Rubio was reportedly uneasy with the demonstratively warm public welcome she had staged for him.

Democrats on the House Foreign Affairs Committee have called for an investigation.

“Her resignation does not absolve her of responsibility,” the lawmakers wrote, adding: “While American families struggled to make ends meet, she used her position as a Trump administration official to enrich herself.”

Chargé d’Affaires Josh Huck will assume ambassadorial duties until a successor is chosen.

Meanwhile, Guilfoyle’s departure is expected to cause delays in agreements between Greece and the US.

These include the so-called “Rubio package”, comprising approximately $4 billion in arms deals finalised only days before the secretary of state’s arrival.

Several procedural steps still remain before the contracts can be signed.

In Athens, opposition parties are demanding answers. Dimitris Mantzos of PASOK called for a detailed briefing on the agreements reached during Rubio’s visit.

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