The National Development & Reform Commission Makes a Statement about Rare Earths

As the trade conflict between China and the United States escalates, there are signals that China might restrict the export of rare earth minerals to the U.S.

Following Chinese President Xi Jinping’s visit to the JL MAG Rare-Earth Company in Ganzhou on May 20, China’s National Development & Reform Commission (NDRC) confirmed the possibility of using rare earths as a counter in the trade battle with the U.S.

“Will rare earths become China’s counter-weapon against the US’s unwarranted suppression? What I can tell you is that if anyone wants to use products made from rare earth to curb the development of China, then the people of the revolutionary soviet base and the whole Chinese people will not be happy.” said a senior official at the NDRC.

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According to Bloomberg, the U.S. relies on China, the leading global supplier, for about 80% of its rare earths, which are used in a host of applications from smartphones to electric vehicles to military gear.

In December 2017, U.S. President Donald Trump signed an executive order to reduce the country’s dependence on external sources of critical minerals, including rare earths. The executive order was aimed at reducing U.S. vulnerability to supply disruptions by exempting the material from its tariffs.

In a May 21 report, Bloomberg Intelligence senior analyst Yi Zhu wrote: “The U.S. will continue to rely on importing rare-earth minerals from China, the materials used in key components for a wide variety of products including electronics, hybrid vehicles and energy-storage systems. Importing from China is cheaper than producing domestically in the U.S.”

For now, the NDRC has not introduced any specific policies. However, if China enforces the restriction of rare earths exports to the United States, there could be a major impact on various U.S. industries.

Featured photo credit to CNBC