For raw materials, access is king

Global trade has never been just about price, but also about access. And increasingly so.

For the last 15 consecutive years, global export restrictions on critical raw materials (CRMs) have steadily increased. The OECD Inventory of Export Restrictions on Critical Raw Materials notes that global CRM export restrictions have expanded fivefold since 2009.

The consequences are becoming harder to ignore, as access to key inputs increasingly shapes competitive advantage. A geopolitical race is underway to secure the building blocks of the green, digital, and defence sectors.

Extraction often dominates the discussion, but refining remains an equally important vulnerability. When one country controls 70%, and sometimes up to 90%, of global processing capacity for certain materials, it can flood the market, crash prices and bankrupt Western competitors before they can even break even.

Above all, when there is such concentration, Europe’s strategic autonomy is weakened, as supply chains become vulnerable to disruption and geopolitical pressure, ultimately jeopardising access to these essential materials.

Against this backdrop, Europe is reassessing key elements of its trade and industrial strategy.

Economic security has become a much more prominent part of EU policymaking

CRMs are officially being treated as core defense and economic security assets. Faced with geopolitical tensions and export controls, the European Commission is turning policy ambitions into concrete operational reality.

The debate is gaining momentum. While the Commission officially launched a public consultation running until 27 October 2026 on a new diversification package, a brand-new joint position paper by Germany and France calls for aggressive new powers to counter market distortions and secure supply chains.

Adding to this debate, a major policy paper from the Jacques Delors Institute goes even further and advocates for a permanent, structural, EU-funded rebalancing instrument to systematically build domestic industrial capacity against Chinese overcapacity.

A key question remains: can Europe strengthen its economic security while managing its trade relationship with China?

These discussions come as the EU and China announced a preliminary trade agreement last Friday which both sides are presenting as an important step toward stabilising a relationship increasingly strained by trade imbalances and economic security concerns.

According to Commissioner Šefčovič, the deal includes a shared understanding to moderate Chinese exports of hybrid and plug-in hybrid vehicles to the EU, a move that could significantly reduce projected vehicle imports over the coming years (a safeguard measure WTO-compliant will be launched soon to this effect).

Progress on CRMs and rare earths is another strategically important element of the agreement. European businesses have become increasingly concerned about their exposure to Chinese export controls and licensing requirements, particularly for rare earth elements and permanent magnets that are essential for electric vehicles, wind turbines, defence systems, industrial machinery and advanced electronics.

The agreement includes a commitment to improve and streamline China’s existing fast-track licensing system, with the aim of making supplies more predictable and transparent for European companies.

In parallel, the agreement would lower tariffs and improve market access for a range of European exports, generating savings for EU businesses and providing some relief to longstanding market access concerns.

However, the agreement doesn’t resolve the fundamental tensions in the relationship. Crucially, it does not provide a comprehensive solution to China’s industrial overcapacity, state support for strategic sectors, or the EU’s persistent trade deficit with China, which reached €360bn in 2025 and has increased since, and remains one of Brussels’ biggest concerns.

These unresolved challenges will be another item on European leaders’ agendas as they gather for the European Council summit this week.

What this all means

Strategic autonomy is gradually moving from the policy sphere into day-to-day business decision-making. For companies reliant on CRMs, supply diversification, long-term sourcing arrangements and investments in circularity are increasingly becoming matters of resilience rather than simply cost optimisation.

For companies exposed to CRMs, the question is no longer whether supply chains will become more politicised, but how quickly procurement and sourcing strategies can adapt.

And for Europe, the broader question remains: is it moving fast enough to reduce its vulnerabilities?