Given the stated aim of US President Donald Trump’s administration to maintain the nation’s advantage in manufacturing prowess over China, there are some curious inclusions on its list of new tariffs.
Among them are rare earth metals, an esoteric collection of minerals with high-tech applications and a history of scarcity.
They are used in everything from hybrid vehicles to electronic gadgets and military hardware.
China’s grip on rare earth metal supply is so strong that the US joined with other nations earlier this decade in a WTO case to force Beijing to export more of the materials, not less, after prices spiked amid a global shortage.
The WTO ruled in favor of the US, while prices eventually slumped as manufacturers turned to alternatives.
Imposing duties will “bring home to the American public the reality of how much of what they use in everyday life contains these technology metals,” Jack Lifton, the Michigan-based founder of rare earth consulting service Technology Metals Research LLC, said by telephone.
“The Chinese mine the rare earths, they separate them, they refine them. This is the long-term trend and a 10 percent tariff will not do anything to stir any domestic production in the US,” he said.
In December last year, Trump signed an executive order to reduce the nation’s dependence on external supplies of what the government called critical minerals — including rare earth metals, cobalt and lithium.
That was aimed at reducing US vulnerability to supply disruptions by identifying new sources and streamlining regulations to “expedite production, reprocessing and recycling of minerals,” according to a White House statement.
China produced more than 80 percent of the world’s rare earth metals and compounds last year, according to the US Geological Survey.
It has about 37 percent of global reserves and supplied 78 percent of US imports, it said.
Also in Trump’s sights is cobalt, an increasingly hot commodity that is a vital ingredient in the batteries for electric vehicles.
China is a major refiner of the material, which is also used in so-called super-alloys for jet engines and space vehicles, and a small but not insignificant exporter to the US.
“China produces as much as 80 percent of the world’s refined cobalt, and we’ve just raised our price by 10 percent,” Lifton said.
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