Beijing considers rare earth export controls targeted at U.S. defense industry
A month after Chinese regulators issued new rules on export controls for rare earth elements, the Financial Times reports that Beijing is evaluating what impact a targeted move could have on the ability of the U.S. to make F-35 fighter jets.
During perhaps the most tense month of former U.S. president Trump’s trade war with China, May 2019, Beijing made three high-profile threats to cut off American access to rare earth elements. In the end, China did not follow through on this threat, apparently choosing instead to merely retaliate against tariffs with tariffs, but warning Washington that it was prepared to escalate its economic pressure on the U.S. if necessary.
With Trump replaced — but his tariffs very much still in place — both the U.S. and China have returned to focus on a far more meaningful area of economic competition than trade balances: technology.
Rare earths are regaining prominence, too.
“China is exploring limiting the export of rare earth minerals that are crucial for the manufacture of American F-35 fighter jets and other sophisticated weaponry, according to people involved in a government consultation,” the Financial Times reports today.
- This follows a move last month, when China’s Ministry of Industry and Information Technology released new rules that made clear that Beijing aims to tighten export controls on rare earth elements.
- According to the ChinaPower project at the Center for Strategic and International Studies, which has a clear and detailed explainer on rare earth supply chains, rare earths are a “collection of 17 minerals that are indispensable to the manufacturing of smartphones, electric vehicles, military weapon systems, and countless other advanced technologies.”
- China “controls most of the world’s mined output, with an even tighter hold of the processing industry, leaving American industries with few avenues to immediately secure short-term supply if curbs were to be put in place,” per Bloomberg.
Analysts call rare earth export controls a “double-edged sword” because while it would inflict significant pain on the U.S. in the short term, it would also be a highly effective motivator for other countries to actually begin mining and processing the materials.
- The significance of the threat from Beijing is also diminishing every month: “In recent months, the Pentagon has signed contracts with American and Australian miners to boost their onshore refining capacity and reduce their reliance on Chinese refiners,” per the FT.
