Not just any magnet—this is a rare earth permanent magnet.
It was manufactured in Estonia, by a Canadian company using raw materials sourced from Australia, and supported by the EU's 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.
Today, China dominates the global market for rare earth permanent magnets.
China is using this quasi-monopoly not only as a bargaining chip, but also weaponizing it to undermine competitors in key industries.
We all witnessed the cost and consequences of China's coercion through export restrictions.
I know this was a big focus for Donald and his team in the London talks with the Chinese.
It is a priority for all of us.
Even if there are signals that China may loosen its restrictions – the threat remains.
But there are other distortions.
We are seeing a new "China shock".
As China's economy slows down, Beijing floods global markets with subsidized overcapacity that its own market cannot absorb.
Europe's approach is de-risking, not de-coupling.
We were first to act swiftly on Chinese EV subsidies.
We are updating our frameworks for screening inbound and outbound investment, to avoid fuelling the military and intelligence capabilities of systemic rivals.
But unilateral action can only take us so far.
To be effective – we have to cooperate among likeminded partners.
I see three priorities for joint G7 action.
First, we must diversify and build resilience in critical supply chains, particularly for raw materials.
Thank you, Mark, for Canada's leadership with the G7 Critical Minerals Action Plan.
No single country should control 80 to 90% of the for essential raw materials and downstream products like magnets.
Remember that Europe, the US and Japan all used to have magnet-manufacturing industries – until they were squeezed out of business by China.
In the 1980s and 1990s, China invested strategically in mining and processing.
By the early 2000s, it overtook other producers.
The first severe warning that China is weaponizing its dominant position came in 2010.
China imposed a rare earth trade embargo on Japan, triggering a tenfold price spike.
Japan responded by diversifying, recycling, and partnering with others – cutting dependence on China significantly.
But China adapted: instead of restricting exports, it flooded global markets with cheap rare earths to wipe out competitors.
Western mines and processors closed, leaving China to dominate.
This pattern of dominance, dependency and blackmail continues today.
It is not enough that each of us takes measures.
Our response must be united.
We need to create alternatives along the supply chain – from mining and refining to recycling and stockpiling – and ensure critical mass of demand.
This means investing in new extraction projects and processing capacity, both in our countries and across the world.
The EU has identified priority projects within the EU and outside that will receive funding.
But we must go further.
Let's offer mineral-rich countries - partnerships that deliver jobs and added value locally.
I also support Canada's focus on "standards-based" markets.
This isn't just to ensure responsible extraction.
We need to build an alternative network of trusted suppliers.
And it will require long-term commitment –To create the conditions our companies need to make the necessary investments.
Second, we need to take a closer look at other key sectors where distortions are the biggest.
Take steel.
We all take measures to address this.
But we could maximise their impact with more coordination among us.
This is why we are interested in creating a metals club.
The same goes for pharma.
We have a strong dependency for Active Pharmaceutical Ingredients (API) and Key Starting Materials (KSM).
And on semiconductors, export controls are necessary for the most advanced ones.
At the same time, we need to prevent strategic dependencies from developing in less advanced semiconductors.
This is another area where we can make use of 'standards' to support trusted trade.
Finally, we need to act together on non-market policies and practices.
Let us jointly monitor what is happening in a few specific sectors and technologies to coordinate policies and tools.
A common G7 response increases our leverage – pressuring China to take more responsibility for the impact of its state-led growth model.
To conclude, we have a shared stake in economic security.
The challenges we face are common.
And the best responses are those we shape together.
