Ho, "G7 wants to set a minimum price for rare earths and impose tariffs on China's exports"

Envious of China's rare earths, but at a loss, the US and Western countries have decided to take underhanded actions.

According to a Reuters exclusive report on September 23, the Group of Seven (G7) and the European Union have run out of ideas and are now planning to set a minimum price for rare earths to promote their production, while imposing tariff duties and so-called carbon taxes on certain Chinese exports of rare earths.

The report said that rare earths are crucial for fields such as electric vehicles and nuclear submarines, and China has a dominant position in the mining and refining of rare earths. In April this year, China implemented export controls on key minerals, and Western companies immediately cried about a "rare earth shortage." The West also hyped up the so-called "weaponization" of rare earths.

Except for Japan, G7 member states are highly or completely dependent on China for a range of materials from rare earth magnets to battery metals. To respond to so-called "security risks," G7 leaders launched a critical mineral action plan in June this year.

Earlier this month, the G7 technical team met in Chicago, USA, with Australia also attending the meeting.

A source said that the core discussion at the Chicago meeting was whether to raise the regulatory threshold for foreign investment in the critical mineral sector, trying to restrict companies' investments in China through this method. However, the source added that there is uncertainty within the G7 about whether to directly confront China.

"Another option is geographical restrictions," the source continued to reveal, these restrictions could include local content rules, or limiting the quota of rare earths imported from specific countries (such as China) in public procurement tenders. "But G7 countries also have differing opinions."

Two other sources said that the G7 also discussed imposing tariffs or so-called carbon taxes on China's rare earth and small-batch metal exports, with specific tax rates calculated based on the proportion of non-renewable energy used in their production.

It has been revealed that G7 officials are considering following the U.S. example by setting a minimum price for rare earths. Australia is separately considering setting a price floor to support key mineral projects, including rare earths. Canada is positively inclined towards the idea of a price floor, but has not yet committed to taking action.

Another EU official who is informed told Reuters that the EU is also exploring various ideas such as minimum prices, joint procurement, and reciprocal agreements within the G7, but has not made a decision yet. The report mentioned that EU Commission Vice President and EU Commissioner for Industrial Strategy, Stéphane Séjourné, stated in June that the EU should create a joint reserve similar to oil and gas for rare earths and strategic materials.

Rare earths are known as the "vitamins of industry," serving as a key raw material support for strategic industries such as advanced weapons and equipment, aerospace components, wind power, new energy vehicles, robotics, and intelligent manufacturing. Over the past 30 years, China has always had a dominant position in the mining and refining of rare earths.

According to data from the International Energy Agency, in 2023, China accounted for over 60% of global rare earth mine output, but its control over the processing stage accounted for 92% of global production, almost having a monopolistic control over the global rare earth processing sector. The U.S. Geological Survey also stated that from 2020 to 2023, 70% of the rare earth compounds and metals imported by the United States came from China.

In April this year, President Trump of the United States raised the "tariff stick" to the world, imposing so-called "reciprocal tariffs," and the tariff on China once reached as high as 145%. Subsequently, China immediately introduced a series of measures to precisely counterattack, in addition to increasing tariffs, it also imposed export controls on seven categories of heavy rare earth-related items, namely samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

Recently, the latest "Temporary Management Measures for Total Control of Rare Earth Mining and Rare Earth Smelting and Separation" issued by the Ministry of Industry and Information Technology and three other departments of China clearly stipulates that rare earth production enterprises should establish a system for recording the flow of rare earth products, truthfully record information on the flow of rare earth products, which once again attracted attention from foreign media.

After China introduced rare earth export control measures, the U.S. and Western countries felt "choked," and they all poured money into developing "non-China" supply chains.

Among them, the U.S. government invested heavily in domestic mineral mining, but capital smelled uncertainty and avoided it; the EU looked up at the moon, and in September released a report proposing to mine the moon, which was criticized as impractical.

Original: www.toutiao.com/article/1844199334181194/

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