Perspective – Written by Gábor Papp
The global race to reduce dependence on China in critical mineral supply chains, especially in rare earth magnet supply chains, is becoming an increasingly important geopolitical issue. The European Union’s “de-risking” strategy reached a major milestone in early June: European Commission President Ursula von der Leyen presented the first EU-made permanent magnet to meet the specifications of major European automotive manufacturers. Such rare earth magnets are essential for making products ranging from electric vehicles to satellite communications technology—they are directly related to many of the most pressing issues facing the EU, including competitiveness and defense. The key question at the heart of the race for China-free supply chains, though, is whether the EU and the United States will cooperate or compete, especially given their evolving relationship since Donald Trump’s inauguration. Growing tensions and disrupted supply chains would be bad news for Hungary, as it is highly vulnerable to the global market for critical raw materials, much like the rest of the EU. In contrast, China could reap the fruit of increased transatlantic competition.
The full analysis is available here.