In the previously unpublished letter of May 9 to Donald Trump’s administration officials, head of the commercial group representing General Motors, Toyota, Volkswagen, Hyundai and representatives of other large car manufacturers expressed serious fears that within a few weeks all production could stand due to deficiencies of rare land magnets from China, which are used in everything, from wiper engines to sensors to prevent wheels to prevent – says Reuters.
“Without reliable access to these elements and magnets Suppliers of car parts will not be able to produce key car componentsincluding automatic gearboxes, throttle, alternators, various engines, sensors, seat belts, speakers, lights, engines, power steering and cameras ” – Reuters quotes a fragment of a letter that the organization of Alliance for Automotive Innovation sent to Trump’s administration.
Serious concerns of directors of global automotive companies
In a letter, also signed by MEMA (The Vehicle Suppliers Association), it was added that without these necessary car components The interruption of American vehicle factories will only be a matter of time.
According to the signatories of the letter, in some cases the lack of Chinese supplies may mean the need to limit the production volume or even closure of vehicle assembly lines.
China is holding the whole market in a handful
China control over 90 percent global processing capacity of magnets used in cars, fighters and household appliances. In response to the actions of the White House, at the beginning of April, Beijing imposed restrictions for exporters in the form of an obligation to obtain a license to sell these key products.
The result of the new regulations was A decrease by half the export of rare lands from China in April.
A fragile truce in the trade war
US representative for trade in Jamieson Greer, who in Geneva negotiated a contract lowering duties told CNBC on Friday that China agreed to endure restrictions on export magnets of rare lands to American companies. But do not work quickly enough, to grant access to the key American industries.
Meanwhile, President Donald Trump accused China on Friday of the conditions of the agreement reachedregarding the temporary reduction of customs duties and other trade restrictions.
On the other hand, there are also signals of dissatisfaction. China’s embassy in Washington replied that it was The United States abuses export controls in the semiconductor sector.
An American clerk who knew about conversations told Reuters that Geneva’s talks concerned only tariffs and Chinese non -tariffs, and US export control was not part of the contract.
Threatened production
Although several export licenses have been awarded recently, including Some Volkswagen suppliers are the procedure for granting permits to export rare metal elements goes very sluggishly. According to Reuters, Indian car manufacturers say that they have not received any license so far and will have to stop production at the beginning of June.
Meanwhile, the German manufacturer of car parts Bosch announced this week that his suppliers They got into the trap of more stringent procedures for obtaining export licenses in China.
Source: Reuters
