China has hit the US with a limit of rare minerals exports

In a tight trade war between Chinese and United States under the leadership Donald Trump Beijing pulled one of his strongest trump cards. In early April, the Chinese government is on the list of goods controlled added seven strategically important rare earth metals to exportswhich represents a direct response to new US customs duties and greatly increases pressure on the US economy and the defense industry, foreign media reported.

Rare Earth or. rare minerals – a group of 17 chemical elements – Despite their name, they are relatively common in the earth’s crust, but rarely found in concentrated sites, and their acquisition and, in particular, refining are technologically demanding and environmentally burdensome processes. It is in this area that Chinese is absolutely dominated; According to the International Energy Agency (IEA), which it gives CnnChina not only gains 61 percent of all the rare minerals in the world, but controls as much as 92 percent of the world’s capacity for their processing (refining). The US and other Western countries have been highly dependent on Chinese delivery of these key materials for decades.

Restrictions in response to American customs duties

The new restrictions that require a special government permit to export seven rare earth and products from them (such as magnets) have been introduced by Beijing as a retaliatory measure for the new customs duties of the administration, which include the basic ten percent customs duties on most imports and higher, targeting rates for countries with large trade surpluses. The customs load for Chinese goods now reaches up to 245 percent. China emphasizes that it wants dialogue, but on the basis of « equality and respect », and that the trade war is not afraid of trade wars, news agencies reported.

China officially substantiates control over the exports of rare earths by using them in advanced technologies and strong magnets and, consequently, with their status of goods double use (with civil and military usability), writes Bloomberg. But analysts are the only ones about the right purpose. « These products and elements directly affect the development of key technologies and support industries in other major markets, » he is for Bloomberg saying David MerrimanDirector of Research at Project Blue. « This improves China’s negotiating position. »

Not only does China get 61 percent of all rare earths in the world, it controls as much as 92 percent of world capacity to process them (refining). Photo: Steve Marcus/Reuters

Interestingly, among the limited (at least for now), they are not neodim (ND) and prazeodim (PR), the most common rare Earth, crucial for permanent magnets in electric vehicles and wind turbines. The US has recently restarted some of these two metals in Mountain Pass in California, but their production (1130 tonnes last year) is modest compared to China (more than 58,300 tonnes),, They say data Project Blue.

American vulnerability and addiction

New Chinese restrictions reveal American vulnerability. The US has minimal or almost null and almost void performance for the processing of most of the now limited rare grounds, data show Project Blue. For many critical minerals, including 72 percent of the rare earth, more than two -thirds of Bismuth and Antimone, and nearly 60 percent arsenic, US depends mainly on China, notes New York Times based on data from the US Geological Service (USGS).

The consequences of restrictions are already felt. After reporting Cnn Shipment of magnets from rare earths for at least five US and European companies existed in China due John Ormerod. Joshua BallardCEO of USA Rare Earth, is for Cnn confirmed that the restrictions are mainly related to these « heavy » rare minerals, where China controls 98 percent of the market, and that exports are currently stopped and US stocks are small. “This is the best move of China. Customs do not have much leverage against us, but here they certainly have it, « Ballard said.

China dominates rare metals

China has built its dominance for decades, the use of lower labor costs, less strict environmental standards and the transfer of technologies from the West, analyzes Cnn. Already Deng Xiaoping In 1992, he recognized the strategic importance with the famous saying: « The Middle East has oil, China has rare land. » Today, China manages the entire chain for high investments in technology and automation, while US companies have lost their knowledge and capacity due to price competition, for price competition, for price competition Cnn explains Ormerod.

Rare lands are indispensable in many products, from smartphones to military equipment. Photo: Steve Marcus/Reuters

Beijing has used its power in 2010 against Japan and in recent years also limited the export of processing technologies and other critical raw materials such as Galin and Germanij.