China issued a report Sunday, June 2, 2019, blaming the United States for a trade dispute and said it won't back down on "major issues of principle". It's been down this road before, with Japan, Canada, Mexico, and the European Union. Hopefully, the Beijing leadership will see that this tactic will harm China far more than it helps it. The compact between the party and the people, growth without political reform, could be damaged.
The charge of handling the yuan was one of the most used by Donald Trump to say that Beijing was unfairly competing with American entrepreneurs. "So if you are an investor this is a significantly different world". It could not have been used without the highest official clearance. It clearly shows that there is no victor in the trade battle.
The restriction of exports to the United States, if enforced, could have a major impact on major U.S. industries worth trillions of dollars that rely on rare earth minerals.
First in line to be added to the list will be Huawei partners that cut off supplies, experts said.
And as the demand for newer, faster, and better technologies will no doubt continue to rise in the future, so too will demand for the raw rare earth materials needed to create them. They fall into two sub-groups: light and heavy, with the heavies being more scarce. It's a dirty business.
Lynas is the largest rare earths producer outside of China.
He also said many of those exports were produced by foreign companies operating in China and that Chinese firms often pocketed only a relatively meagre fee for assembling.
This makes China the new Saudi Arabia.
Apple in particular could potentially feel the most pain, though, as in addition to the presence of rare earths in iPhones, over 90% of iPhone production still resides in China and Taiwan. Australia, the world's second-largest supplier, produced 20,000 metric tons past year.
President Xi Jinping visited rare earth-related businesses in southeastern Jiangxi province earlier this month.
China has options, none of them enticing. Such a move may put more upward pressure on prices of electric cars, just as battery prices were expected to fall to parity with prices of internal combustion powertrains and accelerate the adoption of electric cars.
Over 5,000 USA products coming into China will now face a 25 percent import tax instead of the usual 10 percent. No Chinese citizen would miss the reference or conclude anything other than that China faces a similarly critical moment in its history and will have to rely on the same grit and determination to deal with this challenge. China has responded with its own set of penalties on U.S. goods, which went into effect on Friday.
This is the situation I've found myself in this week over rare earth elements. In the first half of 2019, the cap was placed at 60,000 tons - up from 45,000 the preceding half. Beijing accounted for 80 per cent of rare earth imports to Washington between 2014 and 2017.
One other factor comes into play.
The second, smaller rare-earth project is being developed by ZAO Technoinvest Alliance, which is partially owned by steel pipe maker ChelPipe PJSC.
Extraction is both hard and potentially damaging to the environment. Domestic companies and illegal extractors have been sanctioned recently amid increasing concern about the environment. China produces about 95% of the world's rare earth minerals. Driving up prices today could backfire tomorrow. What is rare, however, are economically feasible rare earth mines.
The Chinese have been importing far fewer agricultural products from the United States, which has left USA farmers in a lurch.
The Chinese threat set off alarms over potential havoc in US technology and defense industries.
What are the types and applications of Rare Earth New Material?