Rare earths: Germany's industry is fighting against alarming shortages!

Rare earths: Germany's industry is fighting against alarming shortages!

Rare earths are essential for many industrial sectors, including high technology, defense, electric cars and renewable energy. In Germany, 17 elements in this category are basic resources whose availability is crucial for production. However, there are serious bottlenecks that are increasingly putting both industry and the defense sectors on alert. The nervousness in the defense industry results from specific shortages of some of the critical rare earths.

The current situation is further exacerbated by China's strict export controls. China has reportedly effectively halted rare earth exports and introduced export licenses for seven critical minerals in April 2025. This move caused terbium and dysprosium exports to fall to zero in May 2025. During the same period, exports of finished rare earth magnets fell by a remarkable 75% compared to the previous year.

Economic impact and trade conflicts

The effects of these bottlenecks are already being felt. In May 2025, Germany was the second largest buyer of Chinese rare earth magnets, importing 209 tons, while the USA only imported 46 tons - a dramatic decline of over 90%. Such supply bottlenecks have already led to production stops by car manufacturers and suppliers in the USA, Japan and Germany.

Behind this is a larger trade conflict between China, the USA and the EU, in which China is using the export ban as a means of pressure. In May 2025, China and the USA agreed on a 90-day tariff break, but the implementation of a framework agreement agreed in London in June 2025 remains uncertain.

Global dependency and future prospects

The dependence of Germany and other countries on China for rare earths is alarmingly high. It is currently over 95%. In addition, customs data from China is often delayed and does not always reflect the current situation. The processing time for export applications can also add up to 45 days, which brings additional uncertainty to supply chains.

In summary, the situation of rare earths in Germany and worldwide is one of the most pressing challenges that must be addressed in the coming months. The critical bottlenecks could not only endanger industry, but also significantly hinder progress in the areas of renewable energy and high technology.

For more information on rare earth shortages, see reports from South Germans and Capital.