Tensions between the EU and China have escalated due to China's restrictions on rare earth exports, prompting EU Trade Commissioner Maroš Šefčovič to call for de-escalation after discussions with Chinese Commerce Minister Wang Wentao. The EU is heavily reliant on China for rare earths, which are crucial for various industries. The situation is challenging for European companies, with only half of their license applications approved by China. The EU is exploring strategies to diversify its supply chain and mitigate the impact of these controls.