Brussels to host EU-China talks on rare earth export controls

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BRUSSELS (Reuters) -European Union and Chinese officials will meet in Brussels next week looking to smooth trade tensions, notably China’s expansion of controls on rare earth exports that threaten to damage important EU manufacturing sectors such as the automotive industry.

European Trade Commissioner Maros Sefcovic and Chinese Commerce Minister Wang Wentao agreed in a two-hour video call on Tuesday that Brussels will host Chinese officials for talks.

The European Commission said on Friday there will be a set of in-person and virtual meetings next week under the ‘Export Control Dialogue’. Neither Sefcovic nor Wang are due to attend.

During their call this week, Sefcovic and Wang raised a variety of issues that are exacerbating trade tensions, including rare earths, EU tariffs on Chinese electric vehicles and the Dutch seizure of China-owned computer chipmaker Nexperia.

The 17 rare earths, of which 12 have export restrictions, are vital for products ranging from electric vehicles to aircraft engines and military radars. China produces around 90% of the world’s processed rare earths and rare earth magnets.

China has grievances with the European Union, but the bloc has been partly caught in the crossfire between Washington and Beijing.

Existing export controls since April caused shortages around the world before a series of deals with Europe and the United States eased the supply crush.

Still, the Commission says that of 2,000 priority applications from EU companies for export licences, only just over half have been properly processed.

(Reporting by Philip Blenkinsop; Editing by Crispian Balmer)