Markets cheered in early May when the US and China agreed in Geneva to lower tariffs and other barriers. But after a few weeks, the shine started to come off that deal, with China accusing the US of violating it with new restrictions and the US saying China failed to honor promises on rare earths.

Some European auto parts plants have suspended output and Mercedes-Benz is considering ways to protect against shortages of rare earths, as concerns about the damage from China's restrictions on critical mineral exports deepen across the globe.

Major automakers are racing to find workarounds to China’s stranglehold on rare-earth magnets, which they fear could force them to shut down some car production within weeks. Several tra