The shipments of the magnets, which are necessary for the production of nearly everything, from cars to missiles, have been stopped at several Chinese ports while the Chinese government drafts a new regulatory framework.
Beijing has halted the export of a number of vital rare earth elements, metals, and magnets as the US-China trade war intensifies. This could cut off supplies to the West of parts essential to electronics, automakers, aerospace companies, semiconductor companies, and a variety of consumer goods.
The shipments of magnets, which are necessary for the production of nearly everything from vehicles to missiles, are being framed while the Chinese government drafts a new export regulation regime. The New York Times reported that several Chinese ports had stopped them.
The new regulatory framework may permanently block goods from reaching some businesses, including U.S. military contractors, according to the article.
American Reliance on Chinese Imports
Beijing is retaliating against US President Trump’s punitive trade war by formally cracking down on exports. A collection of 17 elements utilized in the electronics, energy, defense, and electric car sectors, rare earths are produced in China to a degree of around 90% of the global total.
The action, which Beijing has long suggested was feasible, makes American firms scramble for new supply of the vital minerals they have depended on for decades and escalates trade tensions between the two biggest economies in the world.
According to the NYT story, special export licenses are now required for the shipment of metals and specific magnets created with them from China.
Industry leaders are worried that the procedure might take a long time and that the existing supply of minerals and products outside of China may run out because Beijing’s mechanism for issuing these permits is hardly operational.
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An Action to Show superiority
The action is the most recent example of how China might use its control over the extraction and processing of vital minerals as a weapon, impacting exports to all nations, not just the US.
Beijing may limit shipments by limiting the number of export permits it grants, even if the export curbs fall short of a complete prohibition. Chinese rare earths are used in the supply chains of several US corporations, including Apple, Tesla, and Lockheed Martin.
Some rare earths exist in the US government’s stockpiles, but not enough to last forever for its defense contractors.
Three metal exports to the US have already been completely prohibited by Beijing, and many more have had their exports subject to restrictions.
David Merriman of the consulting firm Project Blue told Reuters that China has significantly more control over heavy rare earths, making the restrictions particularly significant.
He stated, “China has close involvement in supply chains from Myanmar and Laos, and there is currently only one HREE (heavy rare earth element) focused operation outside of China, Myanmar, and Laos.”
The Significance of Rare Metals to the United States
China has suspended the export of heavy rare earth metals because they are used in magnets, which are necessary for many types of electric motors used in the production of electric automobiles, robotics, drones, missiles, satellites, and gasoline-powered vehicles.
flight engines, lasers, automobile headlights, and certain spark plugs and capacitors—electrical parts of the computer processors that run AI servers and smartphones—all require these metals for production.
