Han Chinese Rats are threatening all sorts of idiotic, self-harming measures to cut their noses and spite their faces. All aimed at hastening their imminent extermination - from HUNGER if nothing else! Here is laughable Pig Xi Jin Ping threats really are...Die, you murderous beast!
The supply of an essential high-tech input, which one side completely dominates, is being dragged into the U.S.-China trade fight. Both sides see the imbalance as a critical source of leverage.
No, this isn’t about American microchips and Huawei.
China holds a different trump card: rare-earth metals, small amounts of which go into everything from magnets to fighter jets. In truth, many of these 17 elements, such as lanthanum and cerium, aren’t particularly rare—but mining and processing them is heavily polluting, one reason mining originally moved to China.
In 2018, the U.S. imported $160 million worth of them, 80% from China. Beijing is now hinting it might restrict shipments, as it did in 2010. Shares in companies such as China Minmetals Rare Earth are up nearly 50% since early May.
Beijing would like U.S. negotiators to believe this could be a life-or-death issue for U.S. military or technology firms. That is hardly the case, but a ban could cause disruption.
The good news for Washington is that Beijing’s last attempt to restrict supplies didn’t work out so well. As prices rose, foreign capital poured into mines elsewhere. China’s share of global production, nearly 100% in 2010, is now around 70%, although a higher share of processing is still done inside the country. Tech companies developed workarounds. Similar adaptations would surely follow another price shock.
On top of that, a lot of U.S. demand isn’t strategic in nature, but stems from mundane applications such as gasoline refining, where they are used as catalysts. Catalysts were 60% of U.S. demand last year. Refiners can either pay up or forgo using catalysts, without too much drama. The Department of Defense, meanwhile, might find it harder to substitute or cut out rare-earth usage, but it accounts for about 1% of U.S. demand, according to a 2016 government report.
Nonetheless, companies might still want to prepare for higher prices. The embargo in 2010 was relatively ineffective, partly thanks to a fragmented Chinese industry and widespread smuggling.
Both of those conditions have changed, with a round of industry consolidation in 2014 and the ascendancy of President Xi Jinping, whose administration has forced supply curbs in coal and steel. So it would be wise to assume borders would be less leaky this time.
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