Between the growing trade war between the US and China, China has suspended the export of many important rare earth elements, metals and magnets, which may disrupt the supply of major components essential for defense, electronics, vehicles, aerospace and consumer product industries in western countries.
According to the New York Times report, the Chinese government is currently drafting a new regulatory system on exports. Until this policy is fully implemented, the export of essential magnets used from cars to missiles has been stopped at Chinese ports. Once the new system is active, it could have an impact on the supply of many companies including US defense contractors.
This official action of China is part of vengeance against the US, in response to the trade war launched by President Donald Trump. China consists about 90 percent of global rare earth production. These elements include Samaryium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium and Yatrium, which are used in areas such as defense, electric vehicles, energy and electronics.
On 2 April, Beijing implemented export restrictions on rare earth elements. The decision was taken by the US in response to the US increase the tariff on Chinese products by 54 percent. Which includes minerals as well as permanent magnets and other finished products, which are quite difficult to find options.
The move has further enhanced the trading tension between the world’s two largest economies -. Now American manufacturers are in the race to find alternative suppliers, as they have been dependent on these minerals for decades.
According to the report, now these important metals and their products can be sent out of China only with special export licenses. But the system of issuing the license of Beijing has not yet been fully developed, causing nervousness in the industries that this process may be long and will affect the global supply chain.
This decision is affecting not only the US, but all countries, and it makes it clear that China is now using its position in global mineral supply and processing as a strategic weapon.
Although this export control is not a complete restriction, it can still control the supply by limiting the number of seeding licenses issuing. Large American companies such as Lockheed Martin, Tesla and Apple depend on Chinese rare meanings in the manufacture of their products.
The US has some reserves of these rare earth metals, but it is inadequate to meet the long -term needs of defense contractors. In addition, Beijing has already banned the export of three important metals to the US and has imposed export control over many others.
David Meriman, associated with the consultancy firm project Blue, said that China has strict control over heavy rare earth elements. He said that apart from China, only Myanmar and Laos are mining operations that supply these elements and also have close participation in these supply chains of China.
These heavy rare earth metals under export suspension are used in the manufacture of special magnets, which are essential for electric vehicles, drones, robots, missiles, spacecraft and electric motors used in gasoline cars.
Capacitors are also used in manufacture – these are components that provide energy to devices such as artificial intelligence servers and smartphones.
