China Gears Up to Weaponize Rare Earths in Trade War

(Yahoo! Finance) Jason Rogers David Stringer and Martin Ritchie May 29 2019 Beijing is gearing up to use its dominance of rare earths to hit back in its deepening trade war with Washington. A flurry of Chinese media reports on Wednesday including an editorial in the flagship newspaper of the Communist Party raised the prospect of Beijing cutting exports of the commodities that are critical in defense energy electronics and automobile sectors. The worlds biggest producer China supplies about 80 of U.S. imports of rare earths which are used in a host of applications from smartphones to electric vehicles and wind turbines. The threat to weaponize strategic materials ratchets up the tension between the worlds two biggest economies before an expected meeting between Presidents Xi Jinping and Donald Trump at the G-20 meeting next month. It shows how China is weighing its options after the U.S. blacklisted Huawei Technologies Co. cutting off the supply of American components it needs to make its smartphones and networking gear. China as the dominant producer of rare earths has shown in the past that it can use rare earths as a bargaining chip when it comes to multilateral negotiations" said George Bauk Chief Executive Officer of Northern Minerals Ltd. which is producing rare earth carbonate from a pilot-scale project in Western Australia. The U.S. shouldnt underestimate Chinas ability to fight the trade war the Peoples Daily said in an editorial Wednesday that used some historically significant language on the weight of Chinas intent. The newspapers commentary included a rare Chinese phrase that means dont say I didnt warn you." The specific wording was used by the paper in 1962 before China went to war with India and those familiar with Chinese diplomatic language know the weight of this phrase" the Global Times a newspaper affiliated with the Communist Party said in an article last April. It was also used before conflict broke out between China and Vietnam in 1979.