• 7 hours 6 Tech Trends Transforming The Travel Industry
  • 24 hours Ousted Uber CEO Cashes Out $500 Million In Stock
  • 1 day Trump Prepares For Another Key Tariff Decision
  • 1 day The Free Money Bubble Is About To Burst
  • 2 days The Crushing Reality Of Poverty In America
  • 2 days Should You Buy Into The World’s Largest IPO?
  • 2 days The Infinite Possibilities Of Cosmic Energy
  • 3 days Analysts Link Walking To Economic Growth
  • 4 days Will Japan Turn Its Back On The Aramco IPO?
  • 5 days Global Debt Soars To $188 Trillion
  • 5 days The World's Largest Gold Miners Are Getting Creative
  • 6 days Twitter: The Saudi Spy Tool To Bring Down Dissidents
  • 6 days Broad Commodity Funds Don’t Give Enough Exposure To Gold
  • 7 days Here We Go Again: Another Giant Telecoms Mega-Merger
  • 7 days World's Largest Gold Miner Sees Profits Triple
  • 8 days Microsoft Japan Trials 4 Day Work Weeks, Productivity Soars By 40%
  • 8 days Hedge Funds Lose $4 Billion In Four Days As California Wildfires Rage On
  • 9 days New Viral App May Be A National Security Threat In Disguise
  • 9 days China's $10 Trillion Space Play
  • 9 days Human Energy: Debunking The Matrix
Analysts Link Walking To Economic Growth

Analysts Link Walking To Economic Growth

Overall, those health gains translate…

The Crushing Reality Of Poverty In America

The Crushing Reality Of Poverty In America

A new study claims that…

The Free Money Bubble Is About To Burst

The Free Money Bubble Is About To Burst

Globally, central bankers have cut…

  1. Home
  2. Markets
  3. Economy

Beijing’s Plan To Disrupt Rare-Earth Exports

China crisis

Despite last night's disappointing PMI print, the latest sign that the trade-war backlash is hurting the mainland economy (especially since the credit injections from earlier this year are fading into the distance), Beijing is apparently undeterred, and on Friday, it continued to ratchet up threats about invoking the "nuclear option" of curbing exports of rare earth metals to the US, a move that would cause significant disruptions to supply chains for everything from microchips to fighter jets.

Beijing has reportedly prepared a plan to cut off exports of rare earths to the US, Bloomberg reports, though it didn't offer any details about what this plan might entail.

Beijing has readied a plan to restrict exports of rare earths to the U.S. if needed, as both sides in the trade war dig in for a protracted dispute, according to people familiar with the matter.

The government has prepared the steps it will take to use its stranglehold on the critical minerals in a targeted way to hurt the U.S. economy, the people said. The measures would likely focus on heavy rare earths, a sub-group of the materials where the U.S. is particularly reliant on China. The plan can be implemented as soon as the government decides to go ahead, they said, without giving further details.

Related: Investors Are Stashing Cash At Record Levels

China produces 80% of the world's rare earth metals - which, contrary to what their name might suggest, are actually more plentiful than precious metals like gold.

However, most rare earths imported by the US travel through intermediaries before arriving at US ports. Washington exempted the critical metals, which are used in a broad range of high-tech products, from tariffs.

One analyst cautioned that nothing is yet set in stone.

"Currently, it’s still just a possibility that China may ban or do some kind of restrictions," Racket Hu, a researcher at Shanghai Metals Market, said in a Bloomberg TV interview. "But if it does happen, then we believe prices of rare earths will surge," he said, citing what happened in 2010 when China curbed shipments to Japan.

Indeed, it appears traders are already starting to price in the export curbs, as the VanEck Vectors Rare Earth ETF has risen off its 2019 lows since Trump's Huawei blacklisting elicited threats of retaliation from Beijing.

Though miners, including Australia's Lynas, are scrambling to open new mines...

...the new capacity likely won't be ready in time to prevent significant supply disruptions should Beijing make good on its threats.

By Zerohedge.com

More Top Reads From Safehasven.com:

Back to homepage

Leave a comment

Leave a comment