Long-Awaited Trump-Xi Call Isn’t Enough to Resolve Looming Critical Mineral Shortage this Summer
A high-stakes call between the U.S. and Chinese presidents on Thursday has yet to resolve a global shortage of rare earth exports that businesses say could halt production of cars and other industrial parts this summer.
Rare earths, along with a broader group of critical minerals, are used in weapons, cars and other high-tech products. China has come to dominate the mining and production of those metals, and over the last two years has gradually started to restrict international sales.
In early April, China announced new export controls on seven rare earth elements. Unlike other measures, Beijing did not specify whether they were a response to heightened U.S. tensions.
After both sides reached their breakthrough trade agreement on May 12, China’s Commerce Ministry said on the same day that it held a meeting to strengthen export controls on critical minerals. There was no broad rollback of the restrictions on seven rare earths.
This development came as a surprise to many in Washington, who had expected a repeal of the rare earths restrictions, since the trade agreement had said both countries would suspend most tariffs and roll back countermeasures for 90 days.
But so far, only some Chinese suppliers of U.S. companies have received six-month export licenses for rare earths, the American Chamber of Commerce in China said Friday, citing a survey of members from May 23 to 28.
Among respondents affected by rare earths controls, 75% said their existing supplies would run out within three months, the survey said. The controls mostly affected sectors involving research and development, resources, industrial and tech, but not consumer or services companies, the survey showed.
While China did not mention rare earths in its readout of Chinese President Xi Jinping’s call with U.S. President Donald Trump, the long-awaited conversation itself signaled that both countries would continue to talk, following accusations from both sides of violating the trade agreement.
Source : CNBC
