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Are rare earth metals China's next weapon to deploy in the trade war?

May 20, 2019

We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.
We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.

 

  • As the US and China stand toe to toe, neither flinching, in the trade war, many ask what the next step for each side could be
  • The US is studying another round of tariffs on $300 billion in goods, those not already with tariffs
  • On Monday Chinese President Xi visited a rare earth metals company in a highly publicized visit
  • He was accompanied by Vice Premier Lui He, the official leading the trade talks with the US
  • The visit immediately raised eyebrows for the prominence it was afforded in the local media as well as the fact that the Vice Premier was present

 

us china trade war

 

  • So the questions began-is this the next volley that China is going to lob at the US?  Restricting exports of rare earth metals?
  • China supplies the US with 80% of the rare earth metals it uses in all kinds of electronics from electric cars to semiconductors
  • The US did not include rare earth metals in the list of products whose tariffs were raised to 25%
  • A spokesman for China's foreign ministry told reporters, "please wait and see" when asked how the government will respond to the US
  • While a ban on exports would hurt some domestic Chinese firms, China could use a ban to bolster other domestic industries, especially advanced, high-tech manufacturing
  • A ban on rare earth metals exports could have a devastating effect on US and global tech companies 

 

 

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