Latest news with #exportrestrictions
Yahoo
2 days ago
- Business
- Yahoo
US and China agree framework deal to extend trade war truce
The US and China have extended the truce in their trade war after two days of talks in London that resulted in a 'framework' deal over export restrictions on rare earths and semiconductors. Negotiations to resolve the wider tariff war triggered by Donald Trump in April will continue but the truce settles, for now, growing tension between the two economic super-powers. The talks, which broke up at about midnight UK time after more than 20 hours of discussions over two days, were led by the Treasury secretary, Scott Bessent, alongside the US commerce secretary, Howard Lutnick, and the trade representative, Jamieson Greer. Lutnick expressed optimism on Tuesday that concerns about critical or rare earth' minerals and magnets, which are vital to a range of industries including cars, electronics and defence, would be resolved as the deal was implemented. The wider dispute, triggered by Trump's decision to impose triple-digit tariffs on Chinese imports in April – since eased to a baseline 30% – has yet to be resolved with China's exports to the US plunging 35% year on year in May. Both sides had accused each other of reneging on a preliminary trade deal struck in Geneva last month to ease retaliatory tariffs, with China putting restrictions on exports of rare earths and the US continuing curbs on semiconductor exports. But the trade war has already caused damage on both sides, whatever the positioning and rhetoric. China's exports to the US plunged 35% year on year in May. The choked global supply of rare earths, which China controls, was already threatening to halt production in the automotive sector this summer on both sides of the Atlantic, with permanent magnets used in everything from windscreen wipers to doors. China's delegation was headed up by the vice-premier He Lifeng – a seasoned negotiator at the top of the Chinese government who had also led talks in Geneva. Lutnick told reporters that Tuesday's framework put 'meat on the bones' of the Geneva deal. Its implementation had faltered over China's curbs on critical mineral exports. The deal also would remove some US export restrictions that were recently put in place, Lutnick said. 'We have reached a framework to implement the Geneva consensus and the call between the two presidents,' Lutnick said. 'The idea is we're going to go back and speak to President Trump and make sure he approves it. They're going to go back and speak to President Xi and make sure he approves it, and if that is approved, we will then implement the framework.' Related: China accuses Pete Hegseth of sowing division in Asia in speech 'filled with provocations' In a separate briefing, China's vice commerce minister Li Chenggang said a trade framework had been reached that would be taken back to US and Chinese leaders. There was a cautious welcome from investors and analysts. 'At least now there's a bottom line that neither side is willing to cross,' said Mark Dong, a co-founder of Minority Asset Management in Hong Kong. Deutsche Bank's note to clients on Wednesday was more sceptical. 'So while the mood music has stayed positive, investors may be wary of the pattern that emerged during the previous US-China trade talks in 2018-19, when apparently constructive in-person meetings seemed to take a step back as the negotiating teams returned to their capitals.' Lutnick said China's restrictions on exports of critical minerals and magnets to the US would be resolved as a 'fundamental' part of the framework agreement. 'Also, there were a number of measures the United States of America put on when those rare earths were not coming,' Lutnick said. 'You should expect those to come off, sort of as President Trump said, in a balanced way.' Li said: 'Our communication has been very professional, rational, in-depth and candid.' Reuters and Agence France-Presse contributed to this report Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Why Shares in Synopsys Popped Higher Today
Investors warmed to the stock today on news of thawing tensions in the U.S./China trading relationship. It's far from clear whether there will be any direct benefit to Synopsys from the latest agreement. 10 stocks we like better than Synopsys › Shares in electronic design automation (EDA) company Synopsys (NASDAQ: SNPS) were up by more than 5% at 10 a.m. ET today. The positive developments came after officials from China and the U.S. confirmed that a new trade framework had been agreed upon between the two countries. A thawing in the trade war with China matters to Synopsys for two main reasons. First, the company was forced to suspend its third-quarter and full-year guidance after the U.S. Department of Commerce applied new export restrictions that impacted Synopsys' ability to sell solutions to China. Second, China's market regulator has postponed approval of a merger between Synopsys and Ansys. Both issues are highly significant. In the first six months of its fiscal 2025, Synopsys generated almost 11% of its sales from China. Turning to the Ansys deal, it's a critical part of management's growth plans. The aim is to integrate Synopsys EDA solutions with Ansys' engineering simulation solutions, offering customers the software to design semiconductor chips (which are increasingly being embedded in a broad range of industries) alongside the engineering simulation software that observes how these products behave in the real world. The deal would also open up Synopsys' solutions to the broader range of customers that Ansys has in areas such as automotive, aerospace, and industrial. As yet, there's no sign that the restrictions on EDA exports to China are being lifted, and it's unclear whether China is deliberately holding back approval of the merger as a bargaining chip. As such, it's far from clear how the new framework will change matters for Synopsys. Still, a de-escalation is a step in the right direction and may bring a satisfactory resolution to these issues a bit closer for Synopsys. Before you buy stock in Synopsys, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Synopsys wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $704,676!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $950,198!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 175% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Synopsys. The Motley Fool recommends Ansys. The Motley Fool has a disclosure policy. Why Shares in Synopsys Popped Higher Today was originally published by The Motley Fool
Entrepreneur
4 days ago
- Automotive
- Entrepreneur
Rare Earth Crisis: Auto Industry Hangs On Mix Reserves Of Hope & Fear
Till date, about 50 large companies, including auto component manufacturing firms, have applied for the license and there have been no developments as of now, according to sources with direct knowledge of the matter Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. Since April, China has restricted the exports of rare earth magnets (REMs), a critical component in motors, especially in electric vehicles. Even Internal Combustion Engine (ICE) vehicles need rare earth magnets for motors, driving power steering, windscreen wipers, etc. This suspension of exports has the potential to choke the entire supply chain, resulting in a mayhem for the auto industry. "While the situation is getting alarming by the day, the industry is well engaged with the government and we are hoping that a solution will be found to resolve the issue at an earliest," said Vinnie Mehta, director general, Automotive Component Manufacturers Association of India (ACMA). China, the world's dominant exporter of rare earth magnets, imposed export restrictions on seven rare earth elements and finished magnets, mandating export licences. Restrictions are imposed on Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and Yttrium. These elements are used to produce REMs like neodymium iron boron (NdFeB) and samarium–cobalt (SmCo) magnets. China accounts for over 90 percent of global processing of rare earth elements, effectively controlling the entire supply chain. Source: Nomura The revised framework demands comprehensive end-use disclosures and client declarations, including confirmation that the products will not be used in defence or re-exported to the US. With the clearance process taking at least 45 days, this added scrutiny has significantly delayed approvals. India, which sourced over 80 percent of its ~540 tonne magnet imports from China last fiscal, has started to feel the impact. As of mid June, about 50 large companies, including auto component manufacturing firms, have applied for the license and there are no developments, according to sources aware of the matter. Where did it start and how is it going? China's export control of rare earth magnets to the rest of the world was in response to the aggressive US tariffs against China. This was also a retaliation against the US embargo on export of semiconductors to China. While the primary response was against the US, other countries, mainly, auto manufacturing nations have also been caught into crossfire. The issue has a blanket impact, from the European Union, Japan, South Korea, to India, all are affected. While a lot of the nations have been able to wriggle out in some sense or the other, the problem remains acute when it comes to India. "Some licenses are being issued to German companies. Interestingly, German companies, wherever their footprints are in the European Union, are getting licensing. However, those same companies in India, are yet to get approvals," a source revealed, adding that US companies and other geographies have also started to get licenses. The auto industry has always championed just in time inventories. In certain crucial items, companies would keep inventories of around two months or at the most four months. And as June is the third running month, without import of the magnets, it could soon lead to stagnancy. Given the current scenario, if the inventories were to completely run dry, then it might lead to a stoppage of manufacturing lines in the component industry, adversely impacting the assembly of vehicles. Speculations suggest inventory will stretch only till July, August. "The situation is a bit of an emergency. There is a lack of inventory and it might stretch only till July/August. We really need to get out of this whole scenario of being dependent overtly on one country, and that too, where we don't have the best of relationships with. In the short term, we need to work on getting supplies from China somehow. In the medium term, we have to make sure that we also build up our strategic reserves with other countries," said CS Vigneshwar, president, Federation of Automobile Dealers Associations (FADA). Most impacted: ICE or EVs? According to a Nuvama report, REMs make about 0.1 kg per ICE car, but that number shoots up in EVs and hybrids, where usage jumps to 0.8 kg and 0.5 kg, respectively. "The magnets go in both ICE and EVs, as well as some parts of two wheelers. There is a bigger chance that EV production will be impacted rather than ICE production. But we are yet to find out what the exact impacts are going to be because all these are estimates. This will definitely affect the new launches coming up in EVs," added the FADA president. However, Mehta of ACMA, shared a different view, "The effect will be overall, as REMs are an integral part of safety components used across vehicles." The Indian automobile industry is urging the government to expedite approvals for importing these critical materials. India's biggest carmaker by volume, Maruti Suzuki India, has said that there is no disruption in its operations due to the rare earth magnet issue as of now. "There is a lot of uncertainty and the situation is continuously evolving. We are monitoring the situation and pursuing multiple solutions to ensure continuity in our operations," the company said in a statement. The announcement was issued after reports claimed that the Japanese carmaker reduced its short-term production plans for its maiden electric vehicle, the e-Vitara, by around two-thirds due to REMs shortage. Similarly, Tata Motors, too shared a 'no immediate impact' notice and said it is working with industry associations SIAM and ACMA to actively engage with the government, "We are hopeful," a company spokesperson said. A few weeks earlier, the Chinese government rejected Sona Precision Forgings' application to import REMs, making it the first Indian company to face such a decision under China's tightened export control regime. The supply squeeze comes just as the auto sector is preparing for aggressive EV rollouts. Anuj Sethi, senior director, Crisil Ratings, explained, "Over a dozen new electric models are planned for launch, most built on PMSM platforms. While most automakers currently have 4-6 weeks of inventory, prolonged delays could start affecting vehicle production, with EV models facing deferrals or rescheduling from July 2025." A broader impact on two wheelers (2W) and ICE PVs may follow if the supply bottlenecks persist for an extended period. Bajaj Auto in a statement said that If there is no relief on shipments, EV production will be seriously impaired in July. In FY26, domestic PV volumes are expected to grow 2-4 percent, while electric PVs could rise 35-40 percent, albeit on a low base. Electric 2Ws could grow ~27 percent, outpacing overall 2W growth of 8-10 percent. However, sustained supply tightness could soften this momentum, especially in the EV segment, said a CRISIL report released in June second-week. Despite contributing less than five percent of a vehicle's cost, these magnets are indispensable for EV motors and electric steering systems. With applications across EVs and ICE vehicles, a prolonged supply squeeze could disrupt production of PVs and 2Ws, making this low-cost component a potential high-impact bottleneck for the sector. In a constrained supply scenario, magnets may also get diverted to ICE models, which require fewer units, potentially impacting EV growth. "Today, there is huge amount of electronics used in the automotive industry. Electronics integration has a lot of rare earth usage, such as electronic braking systems, sensors, etc. This could impact the entire automotive industry, if it is not handled in time," Mehta added. As per global consulting firm AlixPartners, usage of REMs is highest in double motor BEVs, followed by single motors BEVs. Hybrids have a higher REM presence, with limited scope for restricted usage. Conventional ICE vehicles will escape the brunt as REMs find use in sensors and other applications which can be replaced by ferrite magnets, especially in lower-end vehicles. Hence, the major impact of a supply shortage will be felt in EVs (be it 2W or PV) as almost all EVs use REMs in their motors. Looking ahead: Short & long term measures Automakers are actively engaging with alternative suppliers in countries such as Vietnam, Indonesia, Japan, Australia, and the US, while also optimising existing inventories. As diversification of supply sources is being actively explored, aligned with policy efforts, the situation continues to evolve for automotive players in their quest to have a steady flow of rare earth magnets. "China's curbs on rare earth exports threaten not only India but also global EV supply chains, impacting battery and motor production reliant on Neodymium and Dysprosium. With China controlling about 60 percent of global rare earth mining and over 90 percent of processing capacity, automakers are likely to face bottlenecks despite localizing production. Ironically, exports of finished cells and motors from China may rise, boosting its EV value chain dominance. Indian OEMs and Tier-1 suppliers are likely to accelerate efforts to diversify rare earth sourcing from regions such as Australia, Africa, and Myanmar. At the same time, we expect a stronger push to develop domestic refining capabilities. The government may also ramp up exploration and extraction of rare earth reserves in Andhra Pradesh and Odisha to strengthen long-term self-reliance in critical materials," said Soumen Mandal, senior analyst, Counterpoint Research. "Today we're living in a very disruptive world. So, we also probably need to make sure that we are ready for any eventuality. The auto industry and the complete dealership networks all have actually gone through various churns in the past, and I'm sure we'll do it in the switch-ups," added FADA president. The government will decide on a subsidy scheme to support domestic production of rare earth magnets within 15 to 20 days, Union Minister for Heavy Industries and Steel, H D Kumaraswamy said on Tuesday, this week. While India has the fifth-largest reserves globally, it currently relies heavily on imports for many rare earth elements due to limited domestic infrastructure for extraction and refining. The government is actively working to boost domestic production and reduce reliance on foreign sources. Talks with companies are on to build long-term reserves of rare earth magnets by providing fiscal incentives for local production. "The Ministry of Heavy Industries, External Affairs and the Ministry of Commerce, are trying to support the industry. The government is seriously working towards a scheme where they want to incentivize manufacturing of rare earth magnets. While India may have reserves, manufacturing of rare earth magnets is not a very easy process. Once a scheme is in place, the government will induce industry players to manufacture these magnets. This has a horizon of a minimum two years, and we are concerned about the immediate future, as we are staring at drying inventories," said another source with direct knowledge of the matter. While China has the largest deposits of REEs at 44 million tons, India also has a substantial amount at 6.9 million tons, according to the U.S. Geological Survey. However, in order to use REE reserves, countries need the ability to mine and extract raw materials, as well as the capacity and technology to process and refine them for final use. There are limited alternatives to China's REM supply. While mining capabilities exist in the US, Myanmar and Australia, the bottleneck lies in metal refining and the manufacturing of magnets. Besides China, refining/manufacturing capabilities exist with Vietnam and Thailand/Japan. China is uniquely placed as it has the entire capability of the supply chain starting with mining to refining and manufacturing. Opinions have also surfaced around recycling of REMs in the long run. However, even if we recycle, only 10 percent of the demand can be met as it's not a primary process of production. Talking about other alternatives to REMs, Mehta explained, "There is no immediate solution to the REMs. Theoretically, you do have solutions, but they may not be as effective or as efficient. Hopefully, in coming times, as part of deal-making, companies have started to work on alternates. However, this is not going to help us in the near immediate." Industry bodies such as the ACMA and Society of Indian Automobile Manufacturers (Siam), are following up on the meeting with Chinese representatives, along with ministries including heavy industries, external affairs, and commerce.
Zawya
18-06-2025
- Business
- Zawya
Battery makers sweat as antimony shortage hits after China's export curbs
MELBOURNE - When China restricts exports of a key mineral, sometimes the pain is sudden and even crippling - enough to spur a major outcry almost immediately. Other times, it takes longer to be felt. For the world's makers of lead-acid batteries, China's restrictions on critical mineral antimony that were put in place late last year have become a major headache - one that their customers also now have as sky-high procurement costs are passed on. "We consider it a national emergency," said Steve Christensen, executive director at the U.S.-based Responsible Battery Coalition, whose members include battery maker Clarios, Honda and FedEx. He noted the key role batteries play in industry and civilian life, how antimony is used in military equipment, as well as the surge in spot prices. Antimony now costs more than $60,000 per metric ton, having more than quadrupled over the past year. "There are no quick solutions... We were completely caught off guard collectively, as an industry," he said. China likely produced 60% of all antimony supply in 2024, according to the United States Geological Survey. Much of antimony mined in other countries is also sent to China for processing. Beijing added the mineral to its export control list last September, requiring companies to gain licences for each overseas antimony deal. It then followed up in December with an outright ban on shipments to the U.S. - an action seen as retaliatory after Washington further restricted exports of advanced semiconductors to Chinese companies. China's global exports of antimony are now just a third of levels seen this time last year. Christensen said U.S. companies are hugely reliant on China for their supply of antimony and buyers are increasingly having to procure from an emerging "grey market", where sellers that have stocked up on the material are charging extremely high prices. China's restrictions on antimony precede its controls on rare earths and rare earth magnets that were imposed in response to U.S. President Donald Trump's tariffs and do not appear to have been discussed in last week's efforts to stabilise a truce in trade tensions between the two countries. Last week's talks between China and the U.S. also did not include any agreement on specialised rare earths such as samarium needed for military applications. VULNERABLE Lead-acid batteries, commonly found in gasoline-engine vehicles, are mostly used to start the engine and to power low-voltage instruments. They are also used as sources of backup power in various industries and to store excess energy generated by solar and wind systems. In addition to batteries, antimony is also essential to military equipment such as night vision goggles, navigation systems and ammunition. Overall antimony demand is some 230,000-240,000 tonnes a year with lead-acid batteries accounting for about a third of that, according to consultancy Project Blue. While many battery makers may have access to antimony-lead alloy from recycled materials, Project Blue estimates they collectively need around 10,000 tonnes a year of higher purity antimony to top up the alloy to reach the right battery properties. Securing that additional portion could be challenging. Project Blue director Nils Backeberg said there is enough antimony outside China to satisfy non-Chinese demand but buyers need to compete with Chinese purchasers such as the country's huge solar industry, and China's smelters are able to offer better terms. "With antimony prices at nearly 5x normal market conditions, the cost becomes a factor and with supply limited on the Western market, a shortage is being felt," he said. For now, it seems that battery makers' antimony woes have not yet led to cuts in output, with companies like Germany's Hoppecke saying they have managed to pass on higher costs. Japan's GS Yuasa said it has passed on costs to some customers and is negotiating with more of its customers to do so. One source at an Indian battery maker said antimony represented only a small cost of a battery and price increases were being passed onto customers, but any more price rises could spell trouble. "If the price does increase further, everyone (in the industry) will be vulnerable," said the source who was not authorised to speak to the media and declined to be identified. The companies and the source at the Indian battery maker declined to disclose the size of their product price hikes. In a sign that profits are being affected, India's Exide Industries blamed high prices for antimony when it logged smaller-than-expected income for its fourth quarter. Christensen of the Responsible Battery Coalition said policymakers should treat the issue as one of national security, arguing that Western countries had become "overly reliant on a single geopolitical adversary for minerals foundational to both national defense and civilian life." "For the U.S., the path forward must include onshoring processing capacity, scaling domestic recycling, and building strategic mineral alliances with trusted partners. Otherwise, this crisis will repeat itself again and again," he added. Some baby steps towards building an antimony supply chain outside of China are being taken. Clarios, owned by global investment firm Brookfield, said last month it was scouting locations for an up to $1 billion critical minerals processing and recovery plant in the U.S. that will extract antimony among other minerals. Nyrstar, owned by global commodity trader Trafigura, also said last month it could produce antimony at its South Australian metals processing plant but would need government support to do so. (Reporting by Melanie Burton; Additional reporting by Eric Onstad in London, Neha Arora in New Delhi, Ernest Scheyder in Houston, Lewis Jackson in Beijing, Yuka Obayashi in Tokyo and Ashitha Shivaprasad in Bengaluru; Editing by Edwina Gibbs)
Reuters
17-06-2025
- Business
- Reuters
Battery makers sweat as antimony shortage hits after China's export curbs
MELBOURNE, June 18 (Reuters) - When China restricts exports of a key mineral, sometimes the pain is sudden and even crippling - enough to spur a major outcry almost immediately. Other times, it takes longer to be felt. For the world's makers of lead-acid batteries, China's restrictions on critical mineral antimony that were put in place late last year have become a major headache - one that their customers also now have as sky-high procurement costs are passed on. "We consider it a national emergency," said Steve Christensen, executive director at the U.S.-based Responsible Battery Coalition, whose members include battery maker Clarios, Honda (7267.T), opens new tab and FedEx (FDX.N), opens new tab. He noted the key role batteries play in industry and civilian life, how antimony is used in military equipment, as well as the surge in spot prices. Antimony now costs more than $60,000 per metric ton, having more than quadrupled over the past year. "There are no quick solutions... We were completely caught off guard collectively, as an industry," he said. China likely produced 60% of all antimony supply in 2024, according to the United States Geological Survey. Much of antimony mined in other countries is also sent to China for processing. Beijing added the mineral to its export control list last September, requiring companies to gain licences for each overseas antimony deal. It then followed up in December with an outright ban on shipments to the U.S. - an action seen as retaliatory after Washington further restricted exports of advanced semiconductors to Chinese companies. China's global exports of antimony are now just a third of levels seen this time last year. Christensen said U.S. companies are hugely reliant on China for their supply of antimony and buyers are increasingly having to procure from an emerging "grey market", where sellers that have stocked up on the material are charging extremely high prices. China's restrictions on antimony precede its controls on rare earths and rare earth magnets that were imposed in response to U.S. President Donald Trump's tariffs and do not appear to have been discussed in last week's efforts to stabilise a truce in trade tensions between the two countries. Last week's talks between China and the U.S. also did not include any agreement on specialised rare earths such as samarium needed for military applications. Lead-acid batteries, commonly found in gasoline-engine vehicles, are mostly used to start the engine and to power low-voltage instruments. They are also used as sources of backup power in various industries and to store excess energy generated by solar and wind systems. In addition to batteries, antimony is also essential to military equipment such as night vision goggles, navigation systems and ammunition. Overall antimony demand is some 230,000-240,000 tonnes a year with lead-acid batteries accounting for about a third of that, according to consultancy Project Blue. While many battery makers may have access to antimony-lead alloy from recycled materials, Project Blue estimates they collectively need around 10,000 tonnes a year of higher purity antimony to top up the alloy to reach the right battery properties. Securing that additional portion could be challenging. Project Blue director Nils Backeberg said there is enough antimony outside China to satisfy non-Chinese demand but buyers need to compete with Chinese purchasers such as the country's huge solar industry, and China's smelters are able to offer better terms. "With antimony prices at nearly 5x normal market conditions, the cost becomes a factor and with supply limited on the Western market, a shortage is being felt," he said. For now, it seems that battery makers' antimony woes have not yet led to cuts in output, with companies like Germany's Hoppecke saying they have managed to pass on higher costs. Japan's GS Yuasa (6674.T), opens new tab said it has passed on costs to some customers and is negotiating with more of its customers to do so. One source at an Indian battery maker said antimony represented only a small cost of a battery and price increases were being passed onto customers, but any more price rises could spell trouble. "If the price does increase further, everyone (in the industry) will be vulnerable," said the source who was not authorised to speak to the media and declined to be identified. The companies and the source at the Indian battery maker declined to disclose the size of their product price hikes. In a sign that profits are being affected, India's Exide Industries ( opens new tab blamed high prices for antimony when it logged smaller-than-expected income for its fourth quarter. Christensen of the Responsible Battery Coalition said policymakers should treat the issue as one of national security, arguing that Western countries had become "overly reliant on a single geopolitical adversary for minerals foundational to both national defense and civilian life." "For the U.S., the path forward must include onshoring processing capacity, scaling domestic recycling, and building strategic mineral alliances with trusted partners. Otherwise, this crisis will repeat itself again and again," he added. Some baby steps towards building an antimony supply chain outside of China are being taken. Clarios, owned by global investment firm Brookfield, said last month it was scouting locations for an up to $1 billion critical minerals processing and recovery plant in the U.S. that will extract antimony among other minerals. Nyrstar, owned by global commodity trader Trafigura, also said last month it could produce antimony at its South Australian metals processing plant but would need government support to do so.
