China is preparing to weaponize its dominance of rare earth minerals — which are a crucial component in the U.S. tech sector — as the trade war between Beijing and Washington heats up.
Rare earths, a group of 17 metals that have been deemed critical by the U.S. Geological Survey for multiple sectors in the U.S., including national defense, are used to produce a number of goods, including smart phones, cameras and nuclear rods. While not actually rare, China accounts for more than 90 percent of global production, according to the U.S. Geological Survey.
After President Trump blacklisted the Chinese telecom firm Huawei with an executive order two weeks ago, China signaled that it might target rare earth minerals. After the ban, Chinese President Xi Jinping visited a major rare earths facility — a move that’s been largely interpreted as the first move to retaliation by Beijing.
China’s top economic planning agency on Tuesday did not rule out the possibility of the government using rare earths as a bargaining chip in the U.S.-China trade war, according to the South China Morning Post.
State-run Chinese media also strongly implied on Wednesday that there could be a crackdown on rare earth sales to the U.S.
In commentary published on Wednesday titled “United States, don’t underestimate China’s ability to strike back”, the People’s Daily — which is the official newspaper of the Communist party — addressed the United States’ “uncomfortable” dependence on rare earths from China.
“Will rare earths become a counter weapon for China to hit back against the pressure the United States has put on for no reason at all? The answer is no mystery,” it said. “We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you!”
The editor-in-chief of the Global Times also said in a tweet on Wednesday that China is “seriously considering” restricting rare earths sales to the U.S.