China’s Grip on Rare Earths May Have Proven Too Strong for Trump

  • Minerals no longer in list of Chinese goods targeted by U.S.
  • China supplied 78% of America’s rare earths imports last year

The U.S. appears to have shelved its plan to levy tariffs on a critical collection of minerals used in everything from hybrid vehicles to electronic gadgets and military hardware.

Rare earths including scandium and yttrium are absent from the latest list of about $200 billion of Chinese goods on which the Trump administration plans to impost duties from next week. They were among a number of items scrubbed from the preliminary target list released in July along with car seats and Bluetooth devices.

China Dependent

The U.S. imports most of its rare-earths needs from China.

Their inclusion in the first place was odd. China produced more than 80 percent of the world’s rare-earth metals and compounds in 2017, according to the U.S. Geological Survey. It has about 37 percent of global reserves and supplied 78 percent of America’s imports.

Other niche but important materials were also missing from the revised list. These included graphite flakes, as well as some forms of silicon and magnesium.

It’s not just the Trump administration that seems to be having second thoughts about making imports of strategically critical commodities more expensive. Beijing dropped its plan to impose levies on imports of U.S. crude oil, an increasingly important source of supply to the Asian nation.

China’s grip on rare-earths supply is so strong that the U.S. joined with other nations earlier this decade in a World Trade Organization case to force the nation to export more of the materials, not less, after prices spiked amid a global shortage. The WTO ruled in favor of the America, while prices eventually slumped as manufacturers turned to alternatives.


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