New Chinese restrictions on rare earth metals will provoke a crisis in the auto industry (1 photo)

The Chinese government's restrictions on rare earth metal exports could force a number of automakers to halt production. The first effects of the restrictions are already being seen in Europe. Reuters reports that Suzuki was the first Japanese auto brand to halt production for this reason.



Suzuki has suspended production of Swift hatchbacks, which is scheduled to resume only on June 16. The company told the agency that it now has clearer supply prospects than when the decision to suspend was made.

The Verge reports that several European auto component manufacturers have already halted production, although it does not specify the brands, and the US has begun preparing for similar measures.

China controls more than 90% of the world's supply chains for rare earth metals, which are used in aerospace and robotics, for example. They are also widely used in the auto industry, from batteries for electric cars and hybrids to catalytic converters.

The restrictions were introduced as one of the retaliatory measures to the increase in customs duties by US President Donald Trump. The Chinese authorities have retained the ability for certain companies to continue exporting, but this requires special permission, and, according to some reports, only a quarter of such requests have been approved.