What's Happening?
The European Union is developing a plan to secure critical minerals essential for magnets and batteries, amid tensions in the US-China trade war. The EU's executive vice-chair of industrial strategy, Stéphane
Séjourné, is spearheading efforts to coordinate buying and secure supplies from other countries. The initiative aims to reduce reliance on China, which dominates the supply chains for these minerals. The plan includes potential funding for recycling and alternative technologies.
Why It's Important?
Critical minerals are vital for various applications, including wind turbines, electric vehicles, and defense systems. The EU's reliance on China for these minerals poses strategic risks, especially as the bloc seeks to upgrade its defense capabilities. The initiative reflects a broader effort to diversify supply chains and enhance economic security. The EU's actions may influence global trade dynamics, particularly in the context of the ongoing US-China trade tensions.
What's Next?
The European Commission is expected to proceed with the plan without needing agreement from all member states, allowing for quicker implementation. Séjourné plans to visit South Africa and Brazil to negotiate deals and secure access to critical minerals. The EU may also consider legislation to enforce economic security considerations within supply chains. The success of these efforts will depend on the EU's ability to navigate complex international trade relationships and secure reliable mineral sources.
