Trade war: will China use ‘nuclear option’ of banning rare earth exports to US?
- China accounted for seven out of every 10 tonnes of rare earth elements mined worldwide last year and was the biggest exporter to America
- As trade tensions have escalated, analysts are questioning whether Beijing will use its dominance of the industry as a check on US tariffs
As China looks for ways to retaliate against the United States in a rapidly escalating trade war, one potential target that is looming large, particularly for the technology sector, is rare earth metals.
The minerals are vital to the production of components that power electric vehicles, anchor the audio and camera systems of Apple iPhones and help the US military’s guided missiles reach their targets.
The elements – little known beyond chemists, geologists and speciality manufacturers until their political importance became more apparent in recent years – are also predominantly mined and refined in China.
As trade tensions have escalated, analysts are questioning whether Beijing will use the “nuclear option”, its dominance in the industry, as a check on efforts by US President Donald Trump to place tariffs on nearly all goods exported from China, as he seeks to change years of Chinese industrial and trade policy.
Speculation has been rampant this week after Chinese President Xi Jinping and his top trade negotiator were photographed at a rare earth mining and processing plant in China’s eastern Jiangxi province, a key region for mining rare earths used in electric vehicles.