Today, I brought a permanent magnet.

Not just any magnet—this is a rare earth permanent magnet.

Manufactured in Estonia by a Canadian company using raw materials from Australia and supported by the EUs Just Transition Fund, this comes from the first rare earth magnet plant in the Western world.

And where does it end up?

In German, French, and American electric vehicles and wind turbines.

This small object tells a much bigger story—a story we are writing together.

Currently, China dominates the global market for rare earth permanent magnets, using its quasi-monopoly as a bargaining chip and weapon to undermine competitors.

We have seen the costs of Chinas coercion through export restrictions, a major focus for Donald and his team during the London talks with the Chinese.

Even with signs that China may ease its restrictions, the threat remains.

We are experiencing a new “China shock.” As Chinas economy slows, Beijing floods global markets with subsidized overcapacity.

Europe’s strategy is de-risking, not de-coupling, and we acted quickly on Chinese EV subsidies.

We are updating frameworks for investment screening to avoid fueling military and intelligence capabilities of systemic rivals.

However, unilateral actions can only take us so far; cooperation among like-minded partners is essential.

For joint G7 action, I see three priorities:

First, we must diversify and build resilience in critical supply chains, especially for raw materials. Thank you, Mark, for Canada’s leadership with the G7 Critical Minerals Action Plan.

No country should control 80-90% of essential raw materials and downstream products like magnets.

Remember, Europe, the US, and Japan once had magnet-manufacturing industries until China squeezed them out.

In the 1980s and 1990s, China strategically invested in mining and processing and by the early 2000s, it overtook other producers.

The first warning of China weaponizing its position came in 2010 with a rare earth trade embargo on Japan, causing a tenfold price spike. Japan diversified, recycled, and partnered to reduce dependence on China significantly.

Yet, China adapted; instead of restricting exports, it flooded markets with cheap rare earths to eliminate competitors.

This dominance, dependency, and blackmail pattern continues.

It is insufficient for each of us to take measures; our response must be united.

We need to create alternatives across the supply chain—from mining and refining to recycling and stockpiling—and ensure a critical mass of demand.

This requires investment in new extraction projects and processing capacity, both domestically and globally.

The EU has identified priority projects for funding.

But we must do more. Let’s offer mineral-rich countries partnerships that create local jobs and add value.

I also support Canada’s focus on “standards-based” markets, not just for responsible extraction, but to build a trusted supplier network.

This requires long-term commitment to create conditions for necessary investments.

Second, we must examine other key sectors with significant distortions, like steel, where coordinated measures could maximize impact.

This is why we are interested in establishing a metals club.

The same applies to pharmaceuticals, where we have a strong dependency on Active Pharmaceutical Ingredients (API) and Key Starting Materials (KSM).

On semiconductors, export controls for advanced types are essential, while we must also prevent strategic dependencies in less advanced semiconductors.

This is another area to apply ‘standards’ for trusted trade.

Finally, we must act together on non-market policies and practices. Let’s monitor specific sectors and technologies to coordinate policies and tools.

A common G7 response increases our leverage, pressuring China to take responsibility for its state-led growth models impact.

To conclude, we share a stake in economic security. The challenges we face are common, and the best responses are those we shape together.

Thank you.