China’s rare earth producers say they are ready to weaponise their supply stranglehold, pass any tariff as cost to US customers – by Eric Ng (South China Morning Post – August 7, 2019)

https://www.scmp.com/

China’s rare earth producers, who control the lion’s share of the world’s output of the elements, said they are ready to use their dominance of the industry as a weapon in the country’s year-long trade war with their customers in the United States.

Chinese producers will pass any tariffs on their exports to customers, in a move that would almost certainly add to the cost of the magnets, motors, light-emitting diodes and hundreds of other devices, according to an industry guild that represents almost 300 miners, processors and manufacturers of rare earth-based products.

The industry “resolutely supports the nation’s counter measures against US import tariffs on Chinese products,” the Association of China Rare Earth Industry said in a statement yesterday citing the consensus from an August 5 meeting. “US consumers must shoulder the costs from US-imposed tariffs.”

The statement by the state-dominated industry is the clearest sign that China is ready to turn its rare earth deposits into a trade weapon, after a year of negotiations to untangle a complex web of tit-for-tat tariffs ended in impasse.

US President Donald Trump upped the ante on August 1 when he tweeted that he would slap a 10 per cent tariff on US$300 billion of Chinese products effective September 1, excluding rare earths.

For the rest of this article: https://www.scmp.com/business/commodities/article/3021947/chinas-rare-earth-producers-say-they-are-ready-weaponise-their

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