Rare Earth Ruckus

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Evodince GmbH
April 22, 2025

Commentary from Leigh Fatzinger 

I'd like to express continued gratitude for the support and feedback readers of this page have offered our small team, validating the appetite for news and insights outside of what is typically found in daily U.S. news feeds. Now on to today's top story:

Diamonds may be a girl’s best friend. But lithium and gallium? A continent’s.
What do your smartphone, flat-panel TV, ChatGPT response, bitcoin wallet, electric vehicle, local wind turbine, and your country’s next-gen fighter jet all have in common?

None of them are possible without fourteen or so "rare earth" elements and specialized magnets. And right now, the global trade war is making those resources harder to secure. 

Rare Earth Ruckus
In response to escalating U.S. tariffs, Chinese customs officials have reportedly begun blocking exports of several heavy rare earth metals—critical components in the manufacturing of the products above—not only to the United States, but also to the European Union. They’ve also paused exports of certain high-strength magnets, of which China controls nearly 90% of global production.

Until the late 1990s, the United States was able to extract enough rare earth minerals to meet its own demand. That was a quarter century ago. Today, only one rare earth mine operates in the U.S.—the Mountain Pass Mine in California’s Mojave Desert.
(Side note: the Chinese government owns an 8.4% stake in its parent company, MP Materials. Side note #2: maybe don’t drink from the public fountains in the Mountain Pass, California area if you happen to be passing through.)

Ore-s D’oeuvres, Anyone?
There are currently no rare earth elements mined in Europe, though known deposits exist. Instead, the EU has leaned into recycling, strategic sourcing, and enacted the Critical Raw Materials Act in 2023 to mitigate supply risk and diversify partnerships. The current trade landscape could also mean the EU is tempted to forge closer ties to China, with rare earth minerals as one of the bargaining chips.

Still, both Europe and the U.S. rely heavily on Chinese exports of these critical materials—and that grip remains tight. Experts estimate it could take a decade or more to build out meaningful rare earth extraction and processing capacity in the U.S. or European Union, even under accelerated conditions and removal of environmental impact regulations and roadblocks (which would be a tall order on this side of the pond).

Magnet for Miscalculation
Tariffs, retaliatory tariffs, and reciprocal tariffs—depending on the day—are now directly threatening the supply chain for smartphones, electric vehicles, batteries, drones, and more. U.S. consumers, who outpace all others in discretionary spending, are particularly exposed in the form of nearly immediate, and potentially dramatic, price increases.

Yes, companies like Apple and Nvidia have announced domestic manufacturing investments. But those facilities are years away from scaling. And expanded domestic mining of rare earth elements in the U.S.? That’s likely decades away from bearing meaningful fruit-onium. (Sorry, friends. Had to.)

The 100 Trillion Dollar Question
How much short- to medium-term pain are consumers in the U.S. (and increasingly the EU) willing to endure in order to fuel long-term self reliance? Can supply chains stretch to 2028 or beyond as retail prices climb? Are people willing to pay more today for the promise of maybe, possibly paying less in the future four to ten or more years? We'll be monitoring the answers to these questions in future editions of Evodince On: EU Trade.

Have thoughts or feedback on our perspective or this briefing overall? I'd love to hear from you.

Don't swipe! Scroll! There's more news from the EU you're not seeing in your daily feeds below.

From Belgium

US Federal Reserve (Fed) Chair Jerome Powell warned last week that escalating tariffs could fuel inflation while undermining growth. He acknowledged that the central bank is facing a growing dilemma in fulfilling its dual mandate of price stability and maximum employment. Powell signalled no rush to cut interest rates further: “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.”

The Swiss Alps ski village that is luring nervous Americans  - Swissinfo.ch (Switzerland) 22 April 2025
Buyers say they are looking for safe, Swiss franc-denominated real estate investments because of the uncertainty generated by the new US administration. The Swiss franc has risen 11% since January against the dollar and is up nearly 12% over the past year.

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INSIGHTS FROM EVODINCE

As rare earth access tightens and trade negotiations twist, here are the top questions shaping the next few weeks:

  • Can the West rebuild its resource independence in time?
    With China restricting exports and owning stakes in U.S. mines, and Europe still lacking domestic production, both blocs are scrambling. Canada looks increasingly central to future supply chains. South Africa and a few others look promising.

  • Will U.S. and EU consumers tolerate price hikes tied to geopolitics?
    From olive oil to smartphones, downstream effects are coming into focus. The transition to “manufacturing and critical supply chain resource autonomy” may be politically popular—but economically painful.

  • How far will the EU bend to keep U.S. trade talks alive?
    Quiet tweaks to methane rules for U.S. LNG may signal a willingness to compromise. But environmental critics are watching closely—and Trump’s potential rollback of emissions disclosure adds another twist.

📖 Read Friday’s edition of Evodince On: EU Trade – Evodince Media (Austria) – 18 April 2025

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From Germany

Is Canada the new mecca for raw materials? - Deutche Welle - 19 April 2025 

China's new restrictions mean the search for alternatives is becoming increasingly urgent. Many importers are now looking to Canada, a country with a long mining tradition. Around half of the world's publicly listed mining companies are based there. It has around 200 mines extracting various minerals and metals, many of which are classified as critical raw materials. More mines may now be established.

EU explores tweaking methane rules for US gas to help trade talks, sources say - Reuters (United Kingdom) - 21 April 2025
The aim would be to preserve the overall strength of the law, while introducing technical standards that could allow U.S. exporters to be recognized as following 'equivalent' methane rules to those of the EU, thereby automatically complying with the EU law.

Greece’s Olive Sector Faces Uncertainty Amid US Tariffs - GreekReporter (Greece) 22 April 2025
Table olives are among the nation’s top export commodities, characterized by high added value and widespread global distribution, with exports reaching over 100 countries. Notably, the United States represents a pivotal market, absorbing 30 percent of total production valued at 214 million euros annually.

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