The EU can defend itself from economic blackmail from China

The European Union has found itself grappling with its heavy dependence on China for rare earth elements critical for industries like automotive, defense, and renewable energy. 

On June 23, 2025, the EU Commissioner for Industrial Strategy, Stephane Sejourne, while talking to the German newspaper Handelsblatt, said that countries within the EU need to establish joint strategic reserves of rare earths to counter supply chain disruptions and potential “economic blackmail” from China.

The EU can defend itself from economic blackmail from China

It is common knowledge that all European countries have oil and gas reserves, but Sejourne wants to take things further by advocating for the creation of a strategic reserve for raw materials.

In June, the European Union announced 13 new raw material projects outside the bloc that would increase its supplies of metals and minerals essential to its competitiveness in the energy transition, as well as defense and aerospace.

This followed China’s decision in April to impose export curbs on rare earth magnets until new licences are obtained, which left diplomats, carmakers and other companies from Europe and other countries rushing to meet with Beijing officials and avert factory shutdowns.

That move from China opened the EU’s eyes to how dependent it has become on the Asian giant for rare earths, and Sejourne wants that to end. She has committed to launching further tenders this year to promote alternative raw material sources.

Sejourne has also warned Beijing, reminding them that the EU also has the tools to defend itself in a potential trade war. “Europe must finally use the same weapons as its competitors,” he said.

China responded in June, saying it attached great importance to the EU’s concerns and would consider speeding up the approval process to get rare earth exports to the EU.

EU leaders hope to address rare earth access at a July summit with China

The issue of the EU’s dependence on China for rare earths is a priority for the EU, and leaders are reportedly planning to address rare earth access at the upcoming July 2025 summit with China.

While China has offered a “green channel” to expedite licenses for EU firms, this is seen as a partial fix, as approvals are still subject to Beijing’s discretion.

The summit aims to negotiate stable supply terms, but EU officials are wary of China’s leverage, and rightfully so, given it has a history of using rare earths exports as a diplomatic tool.

Earlier this month when China’s Commerce Minister Wang Wentao, met with EU trade commissioner Maros Sefcovic, he talked about reciprocation, mentioning how he hoped the bloc would also “adopt effective measures to facilitate, safeguard, and promote compliant trade of high-tech products with China.”

They also spoke of Chinese electric vehicle imports into European countries, which the EU has hit with levies over allegedly unfair subsidies from Beijing.

“The negotiation on the price commitment of electric vehicles between China and Europe has entered the final stage, but both sides still need to make efforts,” the commerce ministry said.

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