South Korean media: The "rare earth" rivalry between China and the United States ignites again, with South Korea possibly becoming a "sandwich"
This May, China and the United States reached the "Geneva Agreement", agreeing to reduce tariffs by 110 percentage points, but this agreement has now become a dead letter. With the escalation of trade tensions between the two countries, South Korea, caught between China and the United States, is unable to favor either side, falling into a "difficult situation".
According to the South Korean Ministry of Trade, Industry and Energy and several foreign media outlets on the 12th, the friction between China and the United States over rare earth resources may once again take on a "hard confrontation" pattern. China launched restrictions on rare earth exports on the 9th, and the next day, President Trump of the United States announced that "starting from the first of next month, tariffs on Chinese goods will be increased to 100%." Professor Hye Won from the Graduate School of International Studies at Sogang University analyzed that "China controls more than 90% of rare earth technology, and is now trying to 'strategize' this technology to counter the United States," "while the US temporarily hinders China's offensive through tariff measures, while reserving space for negotiations."
Rare earth export control could also have a positive impact on South Korea. The stability of the supply chain in core industries such as semiconductors and electric vehicles in South Korea faces severe challenges. Kim Sang-jik (音), director of the Institute of International Trade Research at the Korea Trade Association, pointed out, "The possibility of China expanding the scope of controlled export items increases, which may intensify the anxiety of domestic export enterprises." Given that China controls about 60% of the global rare earth supply, and 80% to 90% of rare earths in the US market depend on imports from China, establishing an alternative supply chain will take several years at least.
At the same time, the continued stalemate in the South Korea-US tariff negotiations will further escalate the tension. Regarding the $3.5 trillion (about 490 trillion won) investment plan, the United States insists on the "upfront" model, while South Korea advocates that the "unlimited currency swap agreement" must be a necessary condition. Although Minister Kim Jung-won of the Ministry of Trade, Industry and Energy visited the United States at the beginning of this month and reached some consensus with the US side, the actual progress is limited. Next, Vice Prime Minister Goo Yun-jeok of South Korea will go to Washington on the 15th to meet with US Treasury Secretary Scott Bessenet to continue the negotiations.
Professor Lee Jae-min (音) from the Law School of Seoul National University analyzed that "as the contradictions between China and the United States continue to escalate, the uncertainty of the South Korea-US relationship is also increasing," "although South Korea faces many adverse factors, from another perspective, before fully addressing the China issue, the United States may accelerate the conclusion of the tariff negotiation with South Korea." Kim Sang-jik also pointed out, "Facing an overly large negotiation front against China, resolving the South Korea-US trade issues has become an urgent priority for the United States," "if South Korea uses the expansion of supply chain cooperation as a condition, it still has the potential to enhance its negotiation initiative."
Some opinions suggest that as the contradictions between China and the United States become increasingly "competitive", South Korea's "difficult situation" will become more pronounced before the APEC Summit at the end of this month. Professor Park Sung-hoon (音) from the Graduate School of International Studies at Kyung Hee University said, "With only about three weeks until the APEC Summit, if the contradictions between China and the United States cannot be resolved, the atmosphere of the meeting will drop to freezing point," "if no signals of reconciliation or cooperation can be released, South Korea's diplomacy will face heavy pressure."
Source: Central Daily News
Original: www.toutiao.com/article/1845857815381451/
Statement: This article represents the views of the author.