A backdrop of US-China tensions over rare earthspublished at 16:16 BST
Danielle Kaye
New York business reporter
Relying heavily on
China for key minerals is a mounting risk for the US.
China processes
around 90% of the world’s rare earths and magnets – essential components of the
global tech supply chain that go into everything from cars to smartphones. Many
US firms depend on imports of the materials from China.
That’s why Beijing’s
recent moves to tighten its grip over rare earth exports have jolted US
officials, hitting a major pain point for the Trump administration.
China is leveraging
its near monopoly on the sector as a bargaining chip in trade talks with
Washington. Earlier this month, Beijing formalised rules mean foreign companies
will need the Chinese government’s approval to export products with even small
amounts of rare earths and must explain their intended use. In response, US
President Donald Trump threatened to impose an additional 100% tariff on
Chinese goods and put export controls on key software.
US Treasury
Secretary Scott Bessent last week blasted China’s latest rare earth curbs. Some
US car companies, he said, had already called the White House with concerns
about a slowdown in supply.
“If China wants
to be an unreliable partner to the world, then the world will have to
decouple,” Bessent said, while still leaving the door open to negotiation.
The backdrop of
renewed fragility in the US-China trade partnership appears to be accelerating
the Trump administration’s search for alternative sources of rare earths. That
presents an opening for Australia, which has large deposits of the minerals –
though experts warn that its production infrastructure is still underdeveloped.
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