China Throws a Lifeline to US and European Carmakers: Is It a Real Deal or Just a Smokescreen?

Rare Earth Rumble: China Plays Nice (For Now)

Alright folks Saul Goodman here your favorite lawyer and occasional economic analyst (when the price is right!). Word on the street is that China in a move that's got more twists than a Heisenberg cook is easing up on those rare earth export restrictions. Apparently they're offering a 'green channel' to our European buddies. I always say 'Better call Saul!' but maybe now it's 'Better call Beijing!'? But don't go celebrating just yet because as I've learned there's always a catch... or ten.

Reciprocity: The Name of the Game (And My Hourly Rate)

Now China's saying they hope the EU will return the favor and play nice with high tech trade. Sounds like a classic 'you scratch my back I scratch yours' situation. And in my line of work I can appreciate a good quid pro quo. I mean who doesn't love a little 'insert coin for service'? I am happy to see the auto giants General Motors Ford and Jeep maker Stellantis get access to Beijing's rare earth licenses Reuters reported on Friday citing unnamed sources maybe they need a lawyer too? Just sayin'.

Bureaucratic Monster? More Like a Hydra!

But here's where things get dicey. This Maximilian Butek character from the German Chamber of Commerce in China calls it a 'huge bureaucratic monster.' Sounds about right. I've dealt with red tape thicker than Walter White's ego. He's not sure if this 'green channel' is for real or just for show. Look I'm all for optimism but I've seen enough shady deals to know when something smells fishier than Los Pollos Hermanos on a bad day.

Europe in the Crossfire: Not a Good Look

Butek also points out that European companies are caught in the crossfire of the US China trade war. And that's never a good place to be. You don't want to be standing between two titans throwing punches – especially when one of them has a monopoly on rare earth minerals. It all hit us quite by surprise that China is even willing to draw this card because this is a retaliation measurement towards the tariffs the U.S. implemented.

Critical Minerals Monopoly: A Game Changer?

China's got a stranglehold on the critical minerals supply chain controlling about 60% of the world's rare earth production. Some folks are even comparing this to the semiconductor crisis during the pandemic. I'm no expert but I know a crisis when I see one and this one could be a real problem for the auto industry. I mean what's a car without its rare earth bits and bobs? Just an overpriced hunk of metal that's what.

Production Stoppages: The Apocalypse is Nigh!

The European Automobile Manufacturers' Association (ACEA) is warning of potential production stoppages as early as next month. That's right folks the car apocalypse is upon us! No more shiny new rides no more road trips... okay maybe I'm exaggerating a bit. But seriously this could be a major headache for automakers. If you're going to commit a crime commit to a CRIME! And this situation is a crime against smooth rides! I heard that Suzuki Motor suspended production of its Swift car due to China's rare earth curbs Reuters reported Thursday citing two unnamed sources maybe they should have called Saul?