China protects its rare earths against US interests and threats

China presented its defense over the announcement that it would increase control over the rare earths it owns. The spokesperson for the Chinese Ministry of Commerce, Lin Jian, went public on Sunday (12) to explain the government’s action and asked the United States to respect the decision, after North American President Donald Trump threatened the country with the return of 100% taxation on imported products.

According to Jian, “China’s export controls are not export bans.” The spokesperson stated that nations doing business with his country were warned about the increase in control mechanisms even before the announcement. The initiative, as he points out, aims to increase the security and stability of global supply chains.

Upon learning of the Chinese decision, Trump posted on his social network that he would place additional tariffs of 100% on the Asian giant’s products from November 1st.

read more: China promises to retaliate against new 100% tariff imposed by the United States

This is another chapter in the trade dispute waged by the US president, which puts an end to a truce that dates back to August. That month, the diplomacy of the two countries reached an agreement that reduced the tariff from 145% on Chinese products to 30%, while the tariff on US products exported to China was from 125% to 10% and allowed the continuation of the commercial relationship.

Now, with the possibility of an increase from 30% to 100%, negotiators will need to enter the field again, as a tariff of this order makes bilateral trade unfeasible.

“Intentional threats of high tariffs are not the right way to get along with China”, highlighted Jian, stressing that his country does not want a trade war, but that “it is not afraid of it”.

USA on the wrong path

In addition to greater control over the export of elements found in rare earths from December, China reported that, on November 8, it will also expand control over equipment exported for the manufacture of electric batteries.

According to Jian, China understands that the US must manage differences through dialogue and based on mutual respect, maintaining economic and commercial consultation on an equal footing.

As he points out, China will employ export controls within the law, adopting the principle of defending world peace and regional stability. The biggest restrictions are in the military field.

In this way, the measure does not restrict trade, and “all export requests in accordance with civil use can obtain approval […] relevant companies need not worry.”

read more: China steps up anti-corruption offensive in key rare earth regions

According to the spokesperson, the impact “is very limited” and the country is willing to make revisions, in addition to facilitating licenses to promote “legitimate trade”.

Regarding Trump’s tariff threat, the spokesperson stated that the US abuses export controls, with discriminatory actions against China through unilateral measures in relation to various products.

As Jian explains, the US trade control list has more than 3,000 Chinese items, while the opposite is only 900, in addition to other retaliations that affect the Chinese maritime, logistics and shipbuilding industry.

“If the United States insists on taking the wrong path, China will certainly take resolute measures to protect its legitimate rights and interests,” the spokesperson said.

In the Chinese government’s view, Lin Jian explained, the country’s measures are necessary to maintain the legitimate interests of Chinese industries and companies. It is expected that the US will return to the path of dialogue, he concludes.

Rare Earths

China has about half of the world’s rare earth reserves, an amount of 44 million tons of reserves, which represents 49% of the world’s total. Brazil comes in second place, with around 21 million tons, 23%. Then comes India (7.7%), Australia (6.3%) and Russia (4.2%). The United States has a reserve that represents only 1.9% of rare earths.

But in addition to dominance in quantity, China also controls production and refining, which reaches 90% of the 17 chemical elements found in rare earths: scandium (Sc), yttrium (Y), lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), promethium (Pm), samarium (Sm), europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm), ytterbium (Yb) and lutetium (Lu).

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This greater control is seen as a threat by the North Americans, as it affects their weapons industry, which depends on these elements for the production of weapons and aircraft, as well as big tech hardware and technology manufacturers, such as Apple and Nvidia, which need chips and semiconductors based on elements such as dysprosium, which are 99% produced in China. Not to mention the entire industry that depends on magnets, capacitors, motors and turbines produced with these chemical elements.

*With information from Xinhua