Following the meeting between President Joe Biden and President Xi Jinping at the Asia-Pacific Economic Cooperation event in San Francisco last month, the hopes for de-escalation in Sino-US relations seem to have fallen apart after China announced export controls on rare-earths technologies.
China is the world's top processor of rare earths and has placed an export ban on technology to extract and separate rare-earth metals, according to Bloomberg, citing a document from the Ministry of Commerce.
The move comes as Washington and its allies try to reduce reliance on China's stranglehold of the global rare earths market. There are 17 rare earth metals, and Beijing controls about 85% of the global refining capacity. These metals are found in everything from electric vehicles to wind turbines to military hardware.
Beijing first hit the US with export bans for gallium and germanium in July due to its anger at the Biden administration's broader semiconductor chip export ban. Tit for tat, eh?
In a separate report overnight, the Wall Street Journal cited sources that said the Biden administration is considering tariffs on certain Chinese products, such as electric vehicles, to strengthen the US' clean-energy sector. This could be due to cheap Chinese clean energy products flooding the market, at a time when solar, wind, and hydrogen are in a bust cycle:
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Beijing's broadening of export restrictions underscores how the East and the West are weaponizing industrial raw materials and technologies against each other. The primary issue for the West is that it has a grand re-shoring of supply chain vision but is far from becoming a reality.
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