Ford production plants halt manufacturing due to SHORTAGE of rare-earth magnets

By avagrace // 2025-06-20

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Ford Motor Co. has paused production at multiple factories, including its Chicago plant, due to a critical shortage of rare-earth magnets caused by China’s retaliatory export restrictions.
Over 90 percent of global rare-earth magnet supply is controlled by China, a vulnerability exposed by trade tensions after U.S. tariffs. The U.S. once had domestic refining capacity but lost it to China's market dominance.
A June agreement between U.S. and Chinese negotiators may resume rare-earth exports, offering short-term relief, but long-term supply chain risks remain unresolved.
Rare-earth elements are vital for technology, defense and EVs. China's monopoly allows it to weaponize trade, threatening U.S. industrial and economic stability.
The crisis highlights the urgent need for the U.S. to rebuild domestic rare-earth mining and processing capabilities to avoid future disruptions and reduce reliance on geopolitical rivals.

The Ford Motor Company has been forced to halt production at multiple factories due to a critical shortage of rare-earth magnets – a direct consequence of escalating trade tensions between the U.S. and China. In late May, the company's Chicago plant where the popular Explorer SUV is assembled, temporarily shut down after running out of rare-earth magnets.. These magnets are not just niche parts, as they are embedded in everything from brake systems to electric vehicle (EV) batteries. Without them, production grinds to a halt. Ford CEO Jim Farley admitted the company is operating "hand-to-mouth" as Beijing's retaliatory export restrictions choke supply chains. He described the situation as "day-to-day," with factories scrambling for just enough parts to keep moving. The crisis exposes a dangerous vulnerability. Washington has ceded near-total control of these essential materials to Beijing, leaving American manufacturing at the mercy of Chinese economic warfare. Industry groups, including the Alliance for Automotive Innovation, warned the White House in May that China's export freeze could paralyze U.S. auto production entirely. (Related: Ford halts U.S. vehicle shipments to China amid retaliatory tariffs.) The roots of this crisis trace back to April, when China abruptly halted rare-earth magnet shipments to the United States. The suspension was in response to U.S. President Donald Trump's 145 percent tariffs on Chinese imports. Two decades ago, the U.S. was self-sufficient in rare-earth processing. But as domestic plants shuttered – the last one in Indiana closed in the early 2000s – China flooded the market with cheap exports, undercutting competitors until it achieved near-monopoly status. Rare-earth elements, 17 metallic minerals crucial for technology and defense, are overwhelmingly controlled by China – which refines over 90 percent of the global supply. Today, Beijing wields this dominance as a geopolitical weapon.

Washington and Beijing agree on a short-term fix

Following two days of discussions in London, U.S. and Chinese negotiators struck an agreement on June 11. Under the deal, Beijing would resume regular exports of rare earths to the U.S. – albeit under temporary licenses. Trump announced on Truth Social that the agreement was "done," though Chinese President Xi Jinping has yet to formally sign off. If upheld, Ford and other automakers could see relief within weeks. But the damage is already done. The episode proves that relying on China for critical materials is a national security risk. Even as the supply chain restarts, Ford and rivals like General Motors are scrambling to secure alternative sources in Australia, Canada and Saudi Arabia. This is not just about cars. Rare-earth elements power everything from smartphones to fighter jets. By outsourcing refining to China, the U.S. surrendered control of a cornerstone of modern industry. Meanwhile, China's strategy is clear: use trade as leverage to force concessions. "The centrality of rare-earth export restrictions to the trade deal underscores the chokehold Beijing holds on global supply chains," analysts at the Center for Strategic and International Studies noted. Ford's ordeal should serve as a wake-up call. While temporary fixes may stave off disaster, the only real solution is reshoring critical supply chains. Lawmakers must prioritize incentives for domestic rare-earth mining and processing before the next crisis hits. For now, Ford's factories may soon reopen, but the lesson remains: America cannot afford to outsource its industrial future to a geopolitical rival. The time to reclaim independence is now – before China turns off the tap for good. Watch this Sky News Australia report about the the U.S.-China trade deal being stalled, affecting vehicle and tech manufacturers in return. This video is from the NewsClips channel on Brighteon.com.

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Washington and Beijing agree on a short-term fix

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