### China Grants Temporary Export Licenses to US Automaker Suppliers Amid Supply Chain Disruptions

In a significant development, China has issued temporary export licenses to rare-earth suppliers serving major US automakers, according to two sources familiar with the matter. The move comes as disruptions in the supply chain emerge due to China’s stringent export restrictions on these critical materials. These licenses, some of which are valid for six months, were granted to suppliers of General Motors, Ford, and Stellantis, the parent company of Jeep.

The details regarding the quantity or specific items covered by these approvals have not been disclosed, and it remains unclear whether this step indicates a broader easing of China’s rigorous rare-earth licensing protocols. This development follows a telephone conversation between President Trump and Chinese President Xi Jinping on Thursday, where they discussed trade issues and agreed to have their teams meet soon.

The rare-earth export restrictions imposed by China in April have had far-reaching effects, disturbing supply chains integral to automakers, aerospace manufacturers, semiconductor firms, and military contractors worldwide. Given that China accounts for approximately 90% of global rare-earth production, its decisions are pivotal, especially as these minerals are crucial for the green energy sector.

Stellantis has expressed that they are collaborating with suppliers to streamline the licensing process, ensuring that immediate production concerns are managed without significant disruptions. GM and Ford, however, have declined to comment on the matter.

The ripple effect of China's export controls is already being felt in the US auto industry. For instance, Ford had to halt production of its Explorer SUV at its Chicago plant for a week in May due to a shortage of rare earths.

This recent approval for auto suppliers follows similar permissions granted to a US electronics firm's suppliers last week and another issued earlier this week to suppliers of a non-auto US company. This staggered approval process underscores the complexity and critical nature of China's control over rare earth exports.

In an effort to reinforce its grip on the rare-earth sector, China has also introduced a tracking system for its rare earth magnet industry, aiming to curb smuggling and enhance oversight.

While these temporary licenses offer a temporary reprieve, the broader implications of China's export controls continue to loom large, with stakeholders watching closely to assess Beijing's next moves in this high-stakes arena.