China uses rare earths as a weapon in the trade war with Trump - Bloomberg
Kyiv • UNN
China is tightening control over the export of rare earth metals in response to US tariffs, which could affect global supplies. The restrictions apply to seven types of metals.
China has expanded the use of critical minerals as a weapon in trade by restricting exports of rare earth metals, threatening to shake up global supplies of key materials widely used in high-tech manufacturing from electric vehicles to weapons, Bloomberg reports, writes UNN.
Details
As a response to US President Donald Trump's so-called tariffs on imported Chinese goods, Beijing said on Friday it would tighten controls on exports of seven types of rare earth metals. The country is the world's largest supplier of these minerals, which include 17 elements of the periodic table.
The move sparked a large rise in related stocks on Monday, with China Rare Earth Holdings Ltd. rising 10% in Hong Kong. China Northern Rare Earth Group added 9.2% and Australia's Lynas Rare Earths Ltd. added 5.1%.
According to the US Geological Survey, China accounts for nearly 70% of global rare earth metal production. Its control over a plethora of niche commodities has long been seen as a potential geopolitical weapon, given America's reliance on Chinese supplies. Beijing has already imposed similar restrictions on other critical minerals such as gallium, germanium, graphite and antimony in the past two years amid rising trade tensions, the publication writes.
The latest export control measures are not a complete ban, but they reportedly mean that any overseas supplies will be carefully monitored in terms of who is buying and why. Exports of other metals have fallen to zero after the introduction of control measures, with exporters needing time for certification.
"New control measures could further reduce global supplies," analysts at Citic Securities Ltd. said in a note. The policy "protects China's national security interests and strengthens the strategic value of investments in the rare earth industry chain," they wrote.
The list of rare earth metals announced on Friday included samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. But two of the most common - neodymium and praseodymium - were not included. They are used in powerful magnets, which are one of the most well-known applications of rare earth metals.
"Unlike the seven selected rare earth metals, they are more available outside of China, which may make any control measures less effective," said David Abraham, an adjunct professor at Boise State University in Idaho. - Perhaps they were excluded to preserve the possibility of future control measures."
According to a statement by the China Nonferrous Metals Industry Association on Sunday, the export restrictions will not harm the stability of the international supply chain.
"As long as companies are not engaged in activities that harm China's national sovereignty, security and development interests, the export control measures will not affect their normal operations and trade," the industry body said.
On Friday, China's Ministry of Commerce said that establishing control over so-called dual-use goods with military applications is in the interests of national security, regional stability and world peace.
