Rare earths can be deterrent without ban on exports

By Hu Weijia Source:Global Times Published: 2019/7/15 19:08:42

The Pentagon is rapidly assessing the rare-earths output in the US, according to Reuters. The move comes after China indicated that it will keep its options open for using rare-earth minerals as a weapon against the US in the trade war.

The Pentagon wants a quick response from US miners and refiners before the deadline of July 31, Reuters reported. 

The Pentagon's urgency is obvious, which proves that China's rare-earth policies are effective. The move reflects the great pressure on the US government over a possible rare-earth fight with China, which is the world's dominant supplier of rare-earth minerals. It appears China is moving in the right direction to give full play to the unique value of rare earths.

Some statistics show that Chinese exports of rare earths fell in May - a major blow to industries related to rare earths in the US, which imports about 80 percent of its rare-earth needs from China. Beijing doesn't want a rare-earth war with the US, but the idea of weaponizing this group of minerals in a trade war is not just empty talk.

Many wonder how things will evolve. China doesn't necessarily need to continue cutting the exports of rare-earth minerals. One option for China is to export the minerals as usual to markets including the US. As long as China dominates the world's rare-earth output, Washington will be under constant pressure from Beijing even though there is no restriction on rare-earth exports. China's near-monopoly on the extraction of rare earths gives it leverage over the US but an export ban will spur rival producers and accelerate US rare-earth independence.

The excessive reliance of the US on China's rare earths is the fundamental reason why Washington is under pressure. China is in no hurry to ban rare-earths exports, and the best choice is to maintain a deterrent force on the US in the long run by using rare earths as leverage. China doesn't want to restrict the export of rare-earth minerals to escalate the trade war with the US, but Washington must not push China too hard.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn


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