China stops rare earth and threatens global industries

The trade war between the United States and China is increasing. Beijing now strikes where it hurts. China has set the export of important minerals and magnets. Six difficult rare earths that are processed exclusively in China, as well as magnets that come from 90 percent worldwide from Chinese production, may only be shipped with special export licenses.

It is well known that China is the workbench of the world and exports countless goods, even if not everyone knows that many products of western brands are manufactured in China. However, it is less common that Beijing is also an important supplier of raw materials. Magnets and rare earths are indispensable for everything that has to do with electronics. Chinese magnets drive electric motors in electric cars, drones, robots, rockets and spaceships. Without these deliveries, the automotive, aviation, semiconductor and armaments industry are in trouble.

The export stop, which began on April 4, was a direct answer to the high tariffs that President Trump imposed on April 2. China not only controls 60 percent of the global support of rare earths, but also 93 percent of their workmanship. Long -term contracts bind mines outside of China to the People’s Republic.

This measure thwarts the plans of the Trump government to cleverly tact with tariffs. The tariffs were introduced with great cancellation and directed almost all products and countries worldwide. After initial turmoil, the USA began to use the system flexibly: tariffs were moved and exposed to individual countries or products. Apparently, it was believed in the White House that indispensable goods and raw materials that are necessary for the intended rein industrialization of the United States to continue importing without any problems. China has this hope. Rare earths are less in focus than crude oil, but it is just as important for the global economy. Without magnets, for example, no electric motors for electric cars can be built. The stocks of the companies are different, but could hardly cushion China’s long -term failure. Electromobility, AI and renewable energies continue to raise the need for rare earths.

The West is therefore looking for alternatives. There are certainly occurrence, for example in Australia, and in Europe Sweden has great potential with a huge find in Kiruna. Countries such as South Africa are also possible. However, production cannot be set up or expanded in a few months. In addition, most of the occurrences with the currently low world market prices can hardly compete. Even if the West overcomes its dependency on China, the costs will increase. Higher prices for rare earths could make electronics, cars and other products more expensive and heat inflation worldwide, especially in import -dependent countries. While western companies struggle with delivery bottlenecks, Chinese manufacturers such as BYD could gain market shares thanks to secure raw materials. That would also make western end products more expensive.

How the spell has a rarer earth remains unclear. China is presumably awarded the export licenses according to political criteria. Allied or “neutral” countries could be supplied preferably, but hostile to go away empty -handed. In the USA, Beijing tightens the situation by relying more and more, especially from the armaments industry. Just one example: Without magnets and electric motors, there are no drone swarms for the military. The importance of severe rarer earths such as dyprosium and terbium for weapons and radar systems illustrates the dependence on China.

China controls 99 percent of severe rare earths and 90 percent of the 200,000 tons of rare earth magnets. These magnets are far more powerful than iron magnets and keep their magnetism permanently. The company JL likes Tesla and BYD with high-performance magnets in all of the hoou, which are 15 times stronger than iron magnets. With these raw materials, permanent magnets for magnetic lifts can be developed, the magnetic pillows of which do not consume electricity. Hard to imagine how such technologies could arise outside of China.

It has long been known that Beijing with rare earth has a strong pressure of pressure. Economically, China can limit the export of these raw materials as long as it is only concerned with western states. From Beijing’s point of view, this is an ideal means of “retribution”. Europe and the USA are Chinese electric cars with punitive tariffs from the market? Then they should build their vehicles without Chinese raw materials. The USA prohibits the export of high-performance AI chips? Why should Beijing then deliver raw materials for their production or even help the western armaments industry?

The West can create alternatives, but that will cost time and increase prices. This is a disadvantage for end products that have to compete with Chinese products worldwide. The export spell also draws a view of Donald Trump’s interest in Canada and Greenland. Greenland in particular has rich, undeveloped occurrence of severe rare earths that are indispensable for industry and armor. Projects such as the Kvanefjeld-Mine offer enormous potential, but encounter obstacles due to strict environmental requirements, since the breakdown often leaves radioactive by-products such as uranium. There are also political tensions because Greenland defends his autonomy and critically examines foreign investments. Nevertheless, Trump sees in these resources a chance to break the dependency on China. If the United States secures access to these occurrences, for example through economic or diplomatic influence, it could become more independent in the long term.