China has upped the ante in its trade war with the United States. Beijing last week imposed export controls on "rare earth" minerals, key elements in the production of technology for your kitchen, car, high-tech military weapons and more.
"Everything you can switch on or off likely runs" on the minerals, said Thomas Kruemmer, the director of Ginger International Trade and Investment, to BBC News. One of the rare earths, neodymium, is used in "loudspeakers, computer hard drives, EV motors and jet engines." Others are used to "manufacture television and computer screens." The minerals are "abundant" in nature, said the BBC, but they are they are "very hazardous to extract." And right now, China has a "near monopoly" on the market.
The export blocks could "cause shutdowns in automotive production," said the Financial Times. They also "threaten Washington's military primacy," said Chatham House, a British think tank. The minerals are critical in the production of the F-35 fighter, as well as "robotics, drones, electric vehicles and touch screens." The trade war could end up giving Beijing a "crucial strategic advantage in long-term U.S.–China competition for military and technological supremacy."
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President Donald Trump may think "he'll find alternative sources of rare earths," said Nicholas Kristof at The New York Times. It will be difficult: America relies on China for 72% of its rare earth metals supply. And ramping up domestic production will not be easy either. Rare earths are "polluting to mine and process," which is why it can take "nearly three decades to get permission to open and operate a rare-earth mine in America." That gives the U.S. a steep challenge. Trump's trade war "seems destined to fracture our alliances and magnify American weakness."
Some worry the trade war could lead to a shooting war. "It is worth remembering how World War II began in the Pacific," said James Stavridis, a retired Navy admiral, at Bloomberg. Nearly a century ago, trade sanctions "cut off Japan from vital resources" like steel, oil and rubber. Pearl Harbor was the culmination of "economic disputes and provocative steps." Beijing's decision to block rare earth exports could be a new "indicator of impending conflict."
What next?
The challenges are immediate, while any potential solutions are off in the future. "Trump is trying to clear the way" for new U.S. mines, said The Associated Press, but any new home-grown operation is "years away." There is a single American mine for rare earth minerals, and its executives are fielding phone calls "from anxious companies" following China's announcement. The effects of the export block "have been immediate," said Matt Sloustcher, a spokesperson for MP Materials. Existing stockpiles should keep American manufacturers operating for now, said the AP, but "shortages may emerge later this year."
