What if China curbs rare-earth exports to EU carmakers?
Rare-earth/battery-material curbs on EU carmakers hit German autos and their suppliers first: short VW/BMW/Mercedes and European auto-parts, long the rare-earth ex-China supply chain (MP Materials, Lynas). The template is China's 2010 rare-earth embargo on Japan and the April 2025 Ga/Ge and rare-earth controls. China is the EU's chokepoint supplier; Germany is the exposed importer. The cascade is mis-built — it routes an EU-auto shock through TSMC/Nvidia/ASML semis, which are tangential; autos and rare-earth miners are the real beta.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. Beijing restricts rare-earth and battery-material exports to EU carmakers, escalating beyond brandy and dairy and crippling German auto output. The trigger decomposes into signed root‑shocks — Trade tension ▲ · China growth ▼ · Industrial demand ▼ · Growth surprise ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -2.4% hist -1.52–-0.86% · other way -0.38% (n=11) |
| 2 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -2.3% hist -1.64–-0.75% · other way +2.87% (n=11) |
| 3 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -2.0% hist -2.16–-0.22% · other way +5.24% (n=11) |
| 4 | TSMC TSMon Hyperliquid 📈 chart | Equity | ▼ -1.9% hist -1.79–-0.36% · other way +2.69% (n=11) |
| 5 | Alibaba BABAon Hyperliquid 📈 chart | Equity | ▼ -1.7% hist -2.1–-0.07% · other way -4.19% (n=10) |
| 6 | Tech sector XLK 📈 chart | Equity | ▼ -1.7% hist -1.1–-0.34% · other way -0.31% (n=11) |
| 7 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -1.5% hist -1.02–-0.48% · other way -1.4% (n=11) |
| 8 | Broadcom AVGOon Hyperliquid 📈 chart | Equity | ▼ -1.5% hist -1.22–+0.06% · other way +2.33% (n=11) |
| 9 | Micron MUon Hyperliquid 📈 chart | Equity | ▼ -1.5% hist -0.95–-0.46% · other way +1.6% (n=11) |
| 10 | Marvell MRVLon Hyperliquid 📈 chart | Equity | ▼ -1.5% hist -1.48–-0.29% · other way +3.24% (n=11) |
| 11 | ASML ASMLon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -2.26–+0.15% · other way -1.86% (n=11) |
| 12 | Chinese yuan CNY 📈 chart | FX | ▼ -1.2% hist -0.9–-0.32% · other way -0.63% (n=11) |
| 13 | Freeport (copper) FCX 📈 chart | Equity | ▼ -1.1% hist -3.63–+0.88% · other way +0.11% (n=11) |
| 14 | Qualcomm QCOMon Hyperliquid 📈 chart | Equity | ▼ -1.1% hist -3.46–+0.62% · other way -1.01% (n=11) |
Probable recommendation
Why we may diverge from history
Trust the cascade's SHORT AVGO/SMH: the +6%/+1% gains come from April-2025 rare-earth/tariff windows where AI-capex demand overwhelmed the supply shock — semis' input-curb channel is real but second-order here.
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| XCU XCU | SHORT | -1.8% · 5d -0.8% | 69% | 40 | 0.32 | ✓ matches cascade |
| INTC INTC | SHORT | -2.8% · 5d -1.8% | 69% | 40 | 0.31 | ✓ matches cascade |
| ETH ETH | SHORT | -4.3% · 5d -6.3% | 65% | 26 | 0.27 | ✓ matches cascade |
| KWEB KWEB | SHORT | -2.5% · 5d -2.0% | 65% | 34 | 0.26 | ✓ matches cascade |
| XPT XPT | SHORT | -0.2% · 5d +0.9% ↺ fades | 65% | 40 | 0.26 | ✓ matches cascade |
| TRY TRY | SHORT | -1.1% · 5d +0.0% ↺ fades | 66% | 40 | 0.25 | ✓ matches cascade |
| Volatility VIX | SHORT | -0.4% · 5d +0.8% ↺ fades | 64% | 40 | 0.23 | ⚠ differs |
| COIN COIN | SHORT | -6.0% · 5d -2.3% | 63% | 18 | 0.22 | ✓ matches cascade |
| KRW KRW | SHORT | -0.3% · 5d +0.1% ↺ fades | 60% | 40 | 0.19 | ✓ matches cascade |
| USDJPY USDJPY | SHORT | -0.3% · 5d -0.5% | 61% | 40 | 0.19 | ⚠ differs |
| QCOM QCOM | SHORT | -2.7% · 5d -2.6% | 63% | 40 | 0.18 | ✓ matches cascade |
| SOL SOL | SHORT | -7.8% · 5d -13.6% | 62% | 20 | 0.18 | ✓ matches cascade |
| Gold XAU | LONG | +1.0% · 5d +0.3% | 59% | 40 | 0.16 | · |
| NVDA NVDA | SHORT | -1.0% · 5d -2.9% | 60% | 40 | 0.15 | ✓ matches cascade |
Why this probability
China rare-earth leverage is live and escalation-prone, but a full auto-crippling embargo in 0-6m is aggressive. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.