Beijing halts rare earth exports, hitting US industries hard
Beijing has suspended the export of certain rare earth minerals and magnets crucial for the global automotive, semiconductor, and aerospace industries, reports "The New York Times." This move is Beijing's response to the ongoing economic conflict with the USA.
The newspaper emphasizes that the halt in exporting magnets, used in "assembling everything"—from drones and cars to missiles—is particularly problematic. The goods are stuck in Chinese ports awaiting the introduction of new regulations. "Once in place, the new system could permanently prevent supplies from reaching certain companies, including American military contractors," notes "NYT." Beijing has also banned Chinese companies from maintaining any contacts with certain American entities, including those in the military sector.
On April 4th, Beijing imposed restrictions on the export of six heavy rare earth metals. Alongside this, restrictions on the distribution of magnets, of which China is the world's leading producer (accounting for 90% of the market), came into effect. After the start of the trade war initiated by Trump, China decided it would issue licenses allowing the export of these critical metals. The process might take time, causing a disruption in the supply chain.
American automotive industry in trouble
"NYT" notes that the suspension of rare earth magnet deliveries will particularly affect Detroit, the heart of the U.S. automotive industry. The lack of magnets will hinder the assembly of cars and other products containing electric motors. However, many more industries will be affected.
"The so-called heavy rare earth metals covered by the export suspension are used in magnets essential for many kinds of electric motors. These motors are crucial components of electric cars, drones, robots, missiles and spacecraft. Gasoline-powered cars also use electric motors with rare earth magnets for critical tasks like steering. The metals also go into the chemicals for manufacturing jet engines, lasers, car headlights and certain spark plugs. And these rare metals are vital ingredients in capacitors, which are electrical components of the computer chips that power artificial intelligence servers and smartphones," explains the American newspaper.
According to Daniel Pickard from the Board of Critical Minerals, export control could have serious consequences for the United States and could also impact China, which has a reputation as a reliable supplier.
The media highlights that the suspension of rare earth metal exports by China won't severely impact Beijing's budget but could adversely affect industries not only in the USA but also in other countries—primarily Germany and Japan. In this way, China is responding to Trump's continuous tariff hikes, targeting sensitive points with precision.
Trade war
A few days ago, the White House imposed tariffs amounting to a total of 145% on China. In response, Beijing announced that tariffs on American goods would rise to 125%. Shortly before, Chinese authorities declared that they would never yield to extreme pressure and intimidation from the United States.
"If the U.S. continues to play a numbers game with tariffs, China will not respond," stated the ministry in Beijing. "China remains open to negotiations with the U.S., but threatening and pressuring are not the right way to engage with China," Chinese authorities declared in a Friday announcement.
