The Chinese government indicated on Tuesday, June 4 it will take steps to restrict rare earth metal exports.
This is seen as a retaliatory move against the United States as a result of imposing tariffs on exports from China.
News of turning off the rare earths tap was reported by Nikkei Asian Review on June 5.
China is a dominant rare earths supplier.
United States relies on China for 80 percent of its imports of the metals and compounds.
Imports account for more than half of the annual consumption of 31 of 35 critical minerals listed by the U.S. Department of the Interior.
Rare earths are a critical component in electric cars, smartphones and even military equipment.
High-tech industries globally could be disrupted as a result of China’s rare earths export control.
China wields a strategic advantage.
The U.S. also understands that its technological advantage hinges on continued access to the minerals mostly supplied by the Chinese.
President Xi Jinping called rare earths metals an “important strategic resource” in May 2019.
Rare-earth experts in China have recommended greater controls on exports of the metals.
The recommendation calls for a centralised system to manage their mining and processing.
The U.S. needs to diversify sources domestically and enhance trade relationships with allies including Japan, the European Union and Australia.
The U.S. might also need to consider stockpiling and relaxing mining regulations at home.
The recognition that rare earths are a vital resource was underscored by Commerce Secretary Wilbur Ross.
He said in a statement that “modern life” without rare earths “would be impossible”.
The U.S. Department of Commerce promised “unprecedented action” to reduce dependence on foreign sources of “critical minerals”. It is looking to boost domestic production.