【By Observer Net, Qi Qian】

"China has found Trump's weakness - rare earths." On October 17, the British Broadcasting Corporation (BBC) published an article with this title, stating that China's new regulations on rare earth exports last week shook the fragile tariff truce between China and the United States. This move strengthened China's control over the global supply of key minerals, while reminding US President Trump of how strong China's trade influence is.

Currently, the US and Western countries are heavily investing in developing alternative supply solutions for rare earths. However, a researcher from an Australian university pointed out that even if the United States and all its allies make rare earth processing a national project, they still "need at least five years to catch up with China."

BBC said that China almost monopolizes rare earth processing, and these key minerals are essential for the production of a wide range of technologies, including smartphones, solar panels, electric vehicles, and military equipment.

For example, it is estimated that an F-35 fighter jet requires more than 400 kilograms of rare earths for its stealth coating, motors, radar, and other components.

Naoise McDonald, a lecturer in international business at Edith Cowan University in Australia, said that China's new rare earth regulations target the vulnerability of the US supply chain and are destined to "shake the entire system." He added: "This really disrupted the Americans' desired negotiation timetable."

It is known that this year, China and the United States have reached several 90-day tariff truce agreements. The next deadline will arrive on November 10. On the 14th, the US Trade Representative had threatened that the US might impose 100% tariffs on Chinese goods imported into the US on November 1 or even earlier.

Natasha Ja Baskar, a consultant at Newland Global Group, stated that China's rare earth exports account for about 70% of the supply of magnetic metal for electric vehicle motors globally. She said that by restricting rare earth exports, China has found the "best immediate leverage" to pressure the US to secure a favorable trade agreement.

Marina Zhang (Marina Zhang), a researcher on critical minerals at the University of Technology Sydney, pointed out that for many years, China has worked to gain a dominant position in global rare earth processing, cultivating a large talent pool in the rare earth field, and its R&D network leads competitors by several years.

She mentioned that although the US and other countries are heavily investing in developing alternative rare earth supply solutions outside of China, they still have a long way to go to achieve this goal. Australia has a large amount of rare earth reserves and is seen as a potential challenger to China's rare earths, but its production infrastructure is still underdeveloped, making processing relatively expensive.

She admitted: "Even if the US and all its allies make rare earth processing a national project, I would say that it would take at least five years to catch up with China."

Financial Times illustration

The BBC cited data indicating that in September, China's key mineral exports fell by more than 30%. However, analysts said that China's economy is unlikely to be harmed by the decline in key mineral exports.

Sophia Kalanzacos, a professor at New York University, stated that rare earths constitute a small portion of China's economy. She also emphasized that although rare earths have little value to China's economy, their strategic value is "huge," because they give China more influence in negotiations with the United States. Kalanzacos said that what China recently did was to "stay ahead" before the trade negotiations with the United States.

Jiao Yang, an assistant professor at Singapore Management University, believes that Washington still has strategic options in response to China's rare earth controls. For example, the US could propose reducing tariffs, which would likely attract China.

McDonald, however, said that Washington could also threaten to impose more trade restrictions on China to hinder its technology sector development. But he admitted that this may have limited effectiveness. "China can continue to move forward under US export controls... But if China cuts off rare earth supplies, that would actually stall all industries. That is the big difference."

On October 9, the Chinese Ministry of Commerce announced a decision to implement export controls on rare earth-related technologies, stipulating that related technologies and their carriers for rare earth mining, smelting separation, metal smelting, magnet manufacturing, and recycling of rare earth secondary resources cannot be exported without permission.

The Financial Times pointed out that China's new restrictions are similar to the US "Foreign Direct Product Rule" (FDPR) export control system, which is exactly the rule the US uses to prevent third countries from exporting semiconductor-related products to China.

Bloomberg News commented that at the time when the US and China are about to meet face-to-face again for negotiations, China demonstrated its trade influence.

The Wall Street Journal analyzed that while the US and Western countries are striving to build a rare earth industry chain to reduce dependence on China, China's latest measures further expand its control over the rare earth supply chain. The newspaper also believes that China's latest rare earth measures are considered an "almost unprecedented" export control, giving China more leverage in trade negotiations.

Photo of US Treasury Secretary Bassett speaking in an interview about China's new rare earth regulations

In response to this situation, the US became restless and kept taking misguided actions. According to reports, US Treasury Secretary Bassett claimed on the 15th that China's export controls on rare earths were "China's confrontation with the world," implying "tariff for rare earths" while trying to unite allies to take joint measures.

The Chinese Foreign Ministry has repeatedly stated that China's export control measures comply with international practices and are non-discriminatory, not targeting specific countries.

On October 15, Foreign Ministry spokesperson Lin Jian stated that the relevant Chinese authorities have explained the policy on rare earth export controls, and China's position has always been clear and consistent. It is the US that wants to negotiate while threatening and intimidating, imposing high tariffs, and implementing new restrictions, which is not the right way to deal with China.

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Original: https://www.toutiao.com/article/7562095765913649704/

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