Chinese rare earth licence rules raise concerns about IP theft

Today’s agenda: Oil prices rise; Fulbright board resigns in protest; US reviews Aukus; Russia’s knock-off brands; and silver and platinum prices surge

Good morning. We have an exclusive story on China’s controls surrounding rare earth exports, a day after US President Donald Trump claimed they would be eased after a trade war truce was restored.

What’s happening: Western companies say Beijing’s commerce ministry is demanding sensitive business information to secure rare earths and magnets. These include production details, images of products and facilities and confidential customer lists as part of its export approval process for critical minerals and magnets, according to multiple companies and official guidelines.

Why it matters: The extensive requirements have raised concerns about potential misuse of data and exposure of trade secrets, with some companies in sensitive industries finding it difficult to comply with or even apply for the export licences. China has significant leverage as it dominates the sector, which is vital to make everything from electric vehicles to fighter jets. One European executive said companies are “willing to do whatever China wants to get the supplies”, and are not prioritising longer-term security concerns.

It is unclear if the latest deal with the US will change China’s approval process for the critical minerals, despite Trump’s remarks. Here’s more from businesses on how the controls have affected them.

• China is winning: Beijing has used rare earth controls to beat Trump in the first skirmishes of the trade war, writes Alan Beattie.

And here’s what else we’re keeping tabs on today:

• Economic data: The UK has its April GDP estimate while the US publishes May producer price index inflation data.

• Israel: Argentine President Javier Milei continues his trip after pledging yesterday to move his country’s embassy to Jerusalem. Meanwhile, the UN General Assembly holds an emergency session on Israel’s actions in Gaza.

• Companies: Tesla is set to launch its self-driving robotaxis in Austin, Texas. Adobe reports results while Tesco has a trading update.

• Markets closed: Nigeria marks Democracy Day while Russia celebrates Russia Day.

Five more top stories

1. Oil prices jumped yesterday amid fears of an escalation in Middle East tensions, after the US ordered dependants of service members in parts of the region to leave. The rise in crude prices came hours after Trump said he was now “less confident” of a nuclear deal with Iran.

2. The board of the Fulbright Program has resigned in protest at what it has described as political interference from the Trump administration. Political appointees at the state department had cancelled Fulbright scholarships for dozens of academics and students, mainly on the basis of their research topics, people familiar with the matter said. Here’s more from the board’s statement.

3. The Pentagon has launched a review of the 2021 Aukus nuclear submarine deal with the UK and Australia to determine whether to scrap the project, according to people familiar with the matter. The move has triggered anxiety in London and Canberra, as ending the agreement would destroy a pillar of security co-operation between the allies.

4. A jury convicted Harvey Weinstein of one sexual assault charge but acquitted him of another, delivering a split verdict in his retrial on sexual assault accusations spanning his career as a Hollywood producer. The jurors have not yet reached a decision on a third charge of rape against the former Miramax studio chief. Read the full story.

5. City of London groups are pushing staff to return to the office more frequently, with Deutsche Bank, UBS, Peel Hunt and others tightening work from home rules. The shift to more office attendance and a return to pre-pandemic working patterns is at the centre of a fight for office space and talent.

• Apollo: The investment group is delaying recruiting junior bankers until next year, after tensions between banks and the private equity sector over securing young talent.

News in-depth

Oleg Paroev, the boss of Vkusno i tochka (“Tasty, full stop”), set up by a former McDonald’s franchisee, told Vladimir Putin in a televised meeting last month that its work would have been “in vain” if the American fast-food chain returned. His concerns are shared by many local companies that took over the business of western brands when they exited Russia. Having reaped the benefits of a consumer boom without the competition, they are now fighting to ensure it stays that way.

We’re also reading . . . 

• Foreign exchange: The weakening US dollar has turned fund managers everywhere into currency traders, writes Katie Martin — whether they like it or not.

• UK spending review: After nearly a year, Labour has made its big play, writes Robert Shrimsley. So why are some of us not immediately convinced?

• Stablecoins: The digital assets are rapidly entering the financial mainstream, but concerns remain about their impact on other parts of the system.

• AI sycophants: OpenAI, Google DeepMind and Anthropic are all stepping up efforts to tackle a growing problem: chatbots telling people what they want to hear.

Chart of the day 

Investors are pouring into silver and platinum as they seek “gold alternatives” and hedges against the US dollar, sending prices for both metals soaring more than 10 per cent this month.

Take a break from the news

From the Tour de France in Scotland to the Saudi Arabian Grand Prix, tourist boards are discovering the benefits of luring big-name sporting events from their traditional homes. Sports tourism is now one of the fastest-growing segments in travel. But will it last?