Study: Increasing risks of shortages of rare earths threaten Austria's and Germany's key industries

Supply Chain Intelligence Institute Austria (ASCII), Wien
Study: Systemic Trade Risk Suppresses Comparative Advantage in Rare Earth Dependent Industries 

"Rare earth elements (REEs) are critical to a wide range of clean and high-tech applications, yet global trade dependencies expose countries to vulnerabilities across production networks. Here, we construct a multi-tiered input-output trade network spanning 168 REE-related product codes from 2007-2023 using a novel AI-augmented statistical framework. We identify significant differences between dependencies in upstream and intermediate (input) products, revealing that exposure and supplier concentration are systematically higher in input products, while systemic trade risk is lower, suggesting localized vulnerabilities. By computing network-based dependency indicators across countries and over time, we classify economies into five distinct clusters that capture structural differences in rare-earth reliance.

China dominates the low-risk, high-influence cluster, while the EU and US remain vulnerable at intermediate tiers. Regression analyses show that high exposure across all products predicts future export strength, consistent with import substitution. However, high systemic trade risk in input products like magnets, advanced ceramics or phosphors, significantly impedes the development of comparative advantage. These results demonstrate that the structure of strategic dependencies is tier-specific, with critical implications for industrial resilience and policy design. Effective mitigation strategies must move beyond raw material access and directly address country-specific chokepoints in midstream processing and critical input production."

Read the full paper: here
Focus auf Deutschland (deutsch): hier
Focus auf Österreich (deutsch): hier
Policy Brief: here


Über das ASCII
Das Supply Chain Intelligence Institute Austria (ASCII) ist ein unabhängiges, nach eigenen Angaben weltweit führendes Lieferketteninstitut für interdisziplinäre, datengetriebene Analysen globaler Produktions- und Logistiknetzwerke - mit dem Ziel, resiliente, nachhaltige und zukunftsfähige Lieferketten zu gestalten.
Das Institut wurde als Forschungs-Joint Venture vom Österreichischen Wirtschaftsforschungsinstitut (WIFO) gemeinsam mit dem Complexity Science Hub (CSH), dem Logistikum der Fachhochschule Oberösterreich und dem Verein Netzwerk Logistik (VNL) gegründet.
Web: ASCII - Supply Chain Intelligence Institute Austria