China’s Latest Strategy to Combat Rising US Tariffs
China Implements Export Restrictions on Rare Metals
The Chinese Ministry of Commerce has announced that starting on April 4, Samarium, Gadolinium, Training, Dysprosium, Lütesium, Scandyum, Itricum, and alloys in 7 categories of mid and heavy rare metals will be included in the export check list. Chinese suppliers will now require government permission to export these rare earth elements, and customs officials will have the authority to confiscate any suspected shipments that have been restricted.
These rare metals are crucial components in a wide range of products, from weapon systems to high-performance engines, nuclear reactors to electronic and optical equipment, spacecraft to medical imaging machines, battery and fuel cells to semiconductor and superconductors. China produces approximately 90% of these rare earth elements globally, and with these new export restrictions, aims to maintain its dominance in this field.
In response to trade tensions, China previously banned the export of certain rare earth elements such as gallium, germanium, and antimoules. The Beijing administration’s move to restrict exports is seen as a strategic economic decision to protect its supply chain and gain leverage in international trade negotiations.
The United States recently announced a 34% increase in customs tariffs on Chinese imports, including a 24% “mutual tariff” and an additional 10% tariff. With these new tariff increases, the minimum customs tariff imposed by the US on imports from China has risen to 54%. In retaliation, China has warned of applying similar tariffs on US imports and has threatened sanctions against American companies.
The trade dispute between the two economic giants continues to escalate, with rare earth metals playing a critical role in the ongoing negotiations. It remains to be seen how these export restrictions and tariff increases will impact global trade dynamics and supply chains in the coming months.
