China Offers EU Strategic Trade Deal: Rare Earth Metals in Exchange for EV Market Access

Behind closed doors in the heart of Paris, high-stakes negotiations unfolded this week that could reshape the future of East-West trade. China, which controls over 90% of the global production of rare earth elements, has presented a strategic proposal to the European Union: open up the European market to Chinese electric vehicles (EVs) in exchange for stable access to critical raw materials.

The offer, dubbed a potential “green channel” for Chinese EVs, comes amid intensifying trade tensions between Beijing and Brussels, particularly over issues of pricing and subsidies in the clean energy sector.

China’s Ministry of Commerce confirmed in a statement that discussions over pricing commitments in the EV sector have reached a “critical stage,” though further effort is needed from both sides to reach a final deal.

The negotiations took place during a meeting between Chinese Commerce Minister Wang Wentao and European Commissioner for Trade Valdis Dombrovskis. While the focus was primarily on electric vehicles, trade friction has expanded to include other sectors — especially French products, which have faced new Chinese restrictions in retaliation for EU anti-dumping investigations.

Despite the strain, sources familiar with the talks revealed that a preliminary agreement has been reached regarding these disputed French goods, pending final approval ahead of a scheduled EU-China summit in July.

The timing of these discussions is particularly significant, as they come on the eve of the 50th anniversary of diplomatic and economic relations between China and the European Union. The upcoming summit is widely viewed as a pivotal moment: a chance to either reset the tone of economic cooperation or open a new chapter of competition and mistrust.