# G7 Moves to Curb China’s Grip on Rare Earths, Raising New Supply Chain Risk

*Wednesday, June 17, 2026 at 12:06 PM UTC — Hamer Intelligence Services Desk*

**Published**: 2026-06-17T12:06:30.206Z (3h ago)
**Category**: markets | **Region**: Global
**Importance**: 8/10
**Sources**: OSINT
**Permalink**: https://hamerintel.com/data/articles/7768.md
**Source**: https://hamerintel.com/summaries

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**Deck**: G7 leaders have agreed on a new target to limit China’s share of global rare earth supply to 60%, while Germany’s chancellor accuses Beijing of undervaluing its currency by up to 30%. The twin moves signal a sharper Western pushback against Chinese economic power that could reshape everything from electric vehicles to defense procurement.

The world’s leading industrial democracies are taking aim at two of Beijing’s most powerful economic levers at once: critical minerals and currency.

G7 officials say the bloc’s members are coalescing around a goal that China should supply no more than 60% of the group’s rare earths, a sharp shift from current dependence levels that leave key industries exposed to Chinese export policy. In a separate intervention at the summit, Germany’s Chancellor Friedrich Merz argued that China’s currency is undervalued by 20–30% and called for a frank discussion among partners.

Rare earth elements are indispensable for high‑tech manufacturing — from electric vehicle motors and wind turbines to advanced electronics and precision‑guided weapons. China has spent decades building a dominant position across mining, processing and refining. By seeking to cap China’s role at 60%, G7 capitals are effectively pledging to rewire complex supply chains that have long favored Chinese costs and scale.

For manufacturers in Europe, North America and Japan, the policy push cuts both ways. On one hand, reduced reliance on a single supplier country lowers the risk that a geopolitical dispute could choke off access to materials their factories and militaries cannot easily replace. On the other, diversification will take time and money, likely raising input costs and complicating investment decisions in sectors already squeezed by the energy transition and trade tensions.

Merz’s accusation of large‑scale yuan undervaluation adds currency politics to the mix. By arguing that China’s exchange rate is artificially low by as much as a third, he is effectively claiming that German and other G7 exporters are competing against a state‑engineered price advantage. His comments suggest that future debates inside the G7 may extend beyond tariffs and subsidies to questions of how to respond if partners judge Beijing to be manipulating its currency to gain market share.

For Chinese policymakers and firms, these signals from Evian are hard to ignore. Beijing has long used its grip on rare earths as quiet leverage, from tightening export controls to nudging foreign companies to locate manufacturing in China. A coordinated G7 effort to cap dependence threatens that influence and could accelerate investment in alternative suppliers in Africa, Latin America, Australia and even within G7 countries themselves.

Defense ministries will feel the stakes acutely. Modern weapons systems, communications gear and surveillance platforms depend on rare earth magnets and components, and many Western arsenals remain structurally exposed to Chinese processing capacity. A credible diversification drive would take years but could eventually reduce the vulnerability of munitions and equipment supply lines to shocks driven by Beijing’s policy choices.

This moment crystallizes a broader shift: great power competition is increasingly fought not just with tariffs and ships, but with mines, refineries and currency pegs.

What to watch now is whether G7 governments back rhetoric with concrete measures — subsidies for new mining and processing projects, stockpiling programs, tighter screening of Chinese investments in critical minerals, or coordinated responses to any future export curbs from Beijing. Markets will also be tracking if the currency debate is translated into formal designations or trade remedies targeting the yuan, steps that would turn summit talking points into a new front in the U.S.–Europe–China economic rivalry.