China Threatens To Cut Rare Earths Supplies To The U.S. — Bad Idea – by Panos Mourdoukoutas (Forbes Magazine – May 16, 2019)

China is threatening to take the trade war to the next stage: cut off rare earth metal supplies to US technology and defense industries. That’s according to a couple of Globaltimes editorials.” US faces squeeze on rare earths,” says one editorial. “US need for rare earths an ace on Beijing’s hand,” goes another.

“Without a reliable domestic supply, the US must rely on rare earths from China to supply industries of strategic importance,” acknowledges Hu Weijia, author of the second editorial.

“Rare earths are vital to many modern technologies and a wide array of weapon systems used by the US military, but China controls the vast majority of the world’s supply,” adds Weijia.“It will take many years if the US wants to rebuild its rare-earth industry and increase its domestic supply to reduce its dependence on China’s minerals.”

That’s a long time, long enough for China to “win a trade war against the US, during which time China’s monopoly on the production of rare earths will help Beijing control the lifeblood of the US high-technology sector.”

Ted Bauman, Senior Research Analyst and Economist at Banyan Hill Publishing, agrees. “If the Chinese implement an export ban and can ride out six months of U.S. tariffs, it could well force Trump to concede,” he says.

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