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US-China trade war
OpinionComment
Cary Huang
Cary Huang

Sino File | China’s ban on rare earths didn’t work on Japan and won’t work in the trade war with the US

  • China is the world’s biggest producer of rare earths but doesn’t have the monopoly on them
  • After Beijing briefly weaponised them against Tokyo, the Japanese built their own supply chain. China should not use them again, against the US

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President Xi Jinping visited JL Mag, a rare earth processing firm, in Ganzhou, Jiangxi province on May 20. Photo: Xinhua
Cary Huang
China has made no secret of its intention to weaponise the strategic market it dominates to retaliate against the US for the Trump administration’s decision to cut off telecoms giant Huawei’s supplies of microchips and components.

The state media and officials have joined a chorus of threats to block exports of rare earths to the US as a counterstrike in the spiralling trade war, with Global Times saying the minerals that the US relies on are “an ace in Beijing’s hand”.

President Xi Jinping reinforced such a possibility when he visited a rare earth processing firm in Jiangxi province, following his US counterpart Donald Trump’s move against Huawei. The state media, well aware of the destructiveness of such a counter-attack, have indicated that China is prepared to fight the trade war with the US to the bitter end.
Rare earth metals, a suite of 17 elements, are crucial to important technological applications ranging from electric cars and smartphones to satellites, lasers, fighter jet engines and missiles. Indeed, they are so strategically significant that the world might be set back a few decades technologically if access to the elements is suddenly denied.

However, rare earths are actually “moderately abundant” in nature, according to the United States Geological Survey. They are rare because they occur in chemical compounds and it is costly and environmentally risky to process them into industrial materials.

A Chinese export ban would hurt some US companies, as 80 per cent of the rare earths imported by the US are from China. But the economic impact would be modest: last year, the US imported about 10,000 tonnes of rare earth compounds and metals worth US$160 million, or only 0.001 per cent of its gross domestic product.

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