The EU must come up with a firm response to China's decision to tighten controls on the export of rare earths. This is what Foreign Minister Lars Løkke Rasmussen (M) says on his way to an informal meeting of EU trade ministers in Horsens.
- We need European unity. We are the largest trading bloc in the world, so we have a lot of muscle. Now we have to show our muscle, says Lars Løkke Rasmussen.
Due to the Danish EU presidency, he is chairing the meeting of EU trade ministers on Tuesday. The meeting comes at a critical time for world trade, where Europe is trying to get the details of the trade agreement with the US in place, while China is simultaneously introducing its own restrictions on exports of technology and critical raw materials.
Access to rare earths in particular, which are important for technologies in the green transition, is critical for Europe. Løkke believes that the EU should cooperate with the US to put pressure on China.
- That is also why we must avoid ending up in a trade war with the US. If we stand together, we can much better pressure China to act in a fair way, says Lars Løkke Rasmussen.
US President Donald Trump has already announced that he will introduce a tariff on Chinese goods that is 100 percent higher than the already existing tariff rate.
According to Trump, the increased tariff rate will come into effect on November 1. However, Løkke will not go that far.
- We do not want to end up in that situation. We have weapons under the table, but we must do our best to avoid using them.
- So it's about an open and direct discussion with China, says Løkke.
Tuesday's ministerial meeting is informal, which in the EU context means that the ministers will not make concrete decisions. EU Trade Commissioner Maros Sefcovic is using the meeting to hear the EU countries' assessment of the consequences of China's decision:
- The informal contacts with the ministers who arrived in Denmark yesterday show that China's decision is received with serious concern.
- It will be seen as an unreasonable decision that creates many problems and complications for European companies, says Maros Sefcovic.
He points out that it is very difficult for European companies to obtain the desired export licenses from China.
- Despite our ongoing contact with the Chinese authorities, we have only had about half of the applications that have been sent to Beijing approved.
- This makes it very difficult for companies to plan, says Maros Sefcovic.
He points out that European companies, for example, will have limited access to permanent magnets.
They are crucial for almost all products with digital elements in.
/ritzau/
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