3 weeks Ago By Pramode Mallik
Though President Donald Trump has raised the rate of tariff on Chinese goods to 245%, making it almost impossible for Beijing to sell its products to the world's biggest consumer economy, the US will suffer heavily due to the tariff war that Washington has launched deliberately. Joining the trade war, China has suspended exports of many critical rare earth elements, metals and magnets. This will hit the West hard in the sectors of arms and ammunition, chips, semiconductors, automobiles, electronics, aerospace and a wide range of consumer goods.
What are Rare Earth Elements? Beijing produces about 90% of the world's rare earths, a group of 17 elements called Rare Earth Elements (RREs). It has placed under the export control list seven categories of rare earth, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. With only three rare earth mines, the US is heavily dependent on China and imports almost 90% of its needs.
The export ban includes mined minerals as well as permanent magnets and other finished products. US: semiconductor, drone, robot, AI, aircraft to suffer These heavy rare earth metals are used in magnets, which are essential for electric motors used in the manufacturing of electric cars, drones, robots, missiles, spacecraft, and gasoline-powered cars. Besides, these metals are used in the manufacturing of jet engines, lasers, car headlights, and spark plugs.
These are also used in capacitors, which are electrical components of the computer chips that power artificial intelligence servers and smartphones. Will China choke US defense industry? According to the Centre for Strategic and International Studies, the RREs are crucial for a range of defense technologies, including F-35 fighter jets, Virginia- and Columbia-class submarines, Tomahawk missiles, radar systems, Predator unmanned aerial vehicles, and the Joint Direct Attack Munition series of smart bombs. Its importance can be gauged by the fact that the F-35 fighter jet contains over 900 pounds of REEs.
An Arleigh Burke-class DDG-51 destroyer needs about 5,200 pounds, and a Virginia-class submarine requires about 9,200 pounds. Earlier US-China cooperation The Select Committee on the Strategic Competition between the US and the Chinese Communist Party published a report titled "Reset, Prevent, Build: A Strategy to Win America's Economic Competition with the Chinese Communist Party" in 2023. The report recommended that "Congress should incentivise the production of rare earth element magnets, which are the principal end-use for rare earth elements and used in electric vehicles, wind turbines, wireless technology, and countless other products.
" Though the US government has maintained stockpiles of some rare earths, these are not enough to supply its defense contractors for a long time. RREs outside China The ban on exports of these rare earths has been imposed on all nations, not only the US, but Washington may suffer most because its related sectors are almost entirely dependent on imports from China. The decision will choke the US firms like Lockheed Martin, Tesla, and Apple that use Chinese rare earths in their supply chains.
Though Australian company Lynas Rare Earths is the largest producer of separated rare earths outside of China, it sends oxides to China for refining. Australia may be reliant on China for REE refining until at least 2026. Japan and Vietnam also have some deposits and refining capacity of the RREs, but the quantity is very low.
So, ultimately, the US has no option for China..
