Business

Trade war threatens U.S. access to rare earths, says China state media

AFP-JIJI

Washington’s trade war with Beijing puts it at risk of losing access to China-produced rare earths, which are critical to manufacturing, a commentary in state media said on Wednesday.

The commentary follows President Xi Jinping’s visit last week to a Chinese rare earths company — a move widely read as a threat, after President Donald Trump banned U.S. companies from providing technology to China’s Huawei over concerns the telecom giant’s equipment could be used by Beijing for espionage.

Trump’s move against Huawei, a rapidly expanding leader in super-fast 5G wireless technology, came as part of a trade war that he began last year over what the U.S. president calls China’s unfair trade policies.

Since then, the two sides have exchanged tariffs on hundreds of billions of dollars’ worth of two-way trade.

After the Huawei ban, Xi called on cadres to brace for a “new Long March,” and editorial commentaries have lambasted Washington.

“While meeting domestic demands is a priority, China is willing to try its best to satisfy global demand for rare earths as long as they are used for legitimate purposes,” Wednesday’s commentary on state-run Xinhua news agency said.

“However, if anyone wants to use imported rare earths against China, the Chinese people will not agree.”

During his visit to the rare earths company, Xi said that they are “not only an important strategic resource, but also a non-renewable resource,” Xinhua reported earlier.

However, analysts have said China appears apprehensive of targeting the minerals just yet, possibly fearful of hastening a global search for alternative supplies of the commodities.

China produces more than 95 percent of the world’s rare earths, and the United States relies on China for upwards of 80 percent of its imports.

Rare earths are 17 elements critical to manufacturing everything from smartphones and televisions to cameras and light bulbs.

That gives Beijing tremendous leverage in what is shaping up largely as a battle between the U.S. and China over who will own the future of high-tech.

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