G7 and EU Strategize Price Floors to Secure Rare Earth Supply Chain

The G7 and EU consider measures like price floors and export taxes to ensure rare earth supply amid Chinese export controls. China's monopoly on rare earths impacts global supply, prompting discussions on critical minerals strategy, including broader trade measures to prevent pricing issues and foster local production.

In a strategic push to safeguard the supply of rare earth elements, the Group of Seven (G7) and the European Union are contemplating the introduction of price floors and export taxes. This move comes in response to China's dominant position in the rare earth market and its recent export controls, which caught global buyers off guard.

China's restrictions on rare earth exports, implemented in retaliation to U.S. tariffs, have prompted concerns of supply disruptions, especially among European automakers. Despite China fast-tracking licenses for European companies, bottlenecks persist, threatening further economic repercussions.

In response, G7 countries, excluding Japan, are largely dependent on China for essential materials. Leaders introduced a Critical Minerals Action Plan aimed at regulatory and investment strategies. Discussions include setting price floors, backed by subsidies, and implementing carbon-based tariffs to deter Chinese dominance, sparking deliberations on confronting Beijing's stronghold.

(With inputs from agencies.)