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American Resources Policy Network
Promoting the development of American mineral resources.
  • ARPN’s McGroarty: Trade War Between U.S. And China One Front in Larger Tech War for Dominance of 21st Century Technology Age

    “The specter of using rare earths as an economic weapon makes clear that the current trade war between the U.S. and China is in fact one front in a larger tech war – a competition to see which country will dominate the 21st Century Technology Age,” says ARPN principal Dan McGroarty in a new piece for The Economic Standard

    Our Achilles’ Heel in this tech war, he says, is our over-reliance on foreign metals and minerals underpinning 21st Century technology (of which Rare Earths are only the tip of the proverbial iceberg) and China’s dominance across the supply chains for many of them.

    While this is daunting, McGroarty argues that policy makers are beginning to realize the urgency of the situation and are taking steps to counter China’s jockeying for pole position. He points to a little-noticed dinner at this week’s G20 meeting in Osaka, Japan between newly-reelected Australian Prime Minister Scott Morrison and U.S. President Donald Trump. 

    Writes McGroarty:

    “With the media focused on the meetings between the American president and his Chinese and Russian counterparts, the decision to start the summit with a U.S.-Australia session merits more attention.  Both countries – joined by Canada and the U.K. — are part of a little-known forum called the NTIB, the National Technology Industrial Base, an entity created by U.S. law that treats the technological and industrial might of all four allies as a single entity for national security purposes.

    With three-fourths of the NTIB — the U.S., Australia and Canada – among the world’s most resource-rich nations, the forum offers the perfect opportunity to work in concert to develop critical minerals.  The table was set in early 2018, when then-Prime Minister Malcolm Turnbull and President Trump issued a joint declaration testifying to the primacy of tech metals [.] (…)

    Since that declaration, both the U.S. and Australia have formulated Critical Minerals strategies, while the U.S. has issued a Defense Industrial Base supply chain report stating that ‘…China represents a significant and growing risk to the supply of materials deemed strategic and critical to U.S. national security.’  The U.S.-Australia G20 meeting comes just days after Canadian Prime Minister Justin Trudeau – Canada has been an NTIB member for more than 20 years — met with President Trump at the White House, and the two leaders ‘instructed officials to develop a joint action plan on critical minerals collaboration.’  We may be seeing the piece-parts of a larger U.S-Australia-Canada critical minerals strategy put in place.”   

    With this joining of forces at the governmental level being complemented by private sector collaboration as outlined by McGroarty, we may indeed be witnessing the beginning of a “tech war counter-offensive, leveraging the resource wealth of the U.S. and its leading allies to ensure adequate supplies of the materials that power the transformative technologies of the 21st Century.”

    Here’s hoping this effort does not fizzle.  As Benchmark Industrial Minerals managing director Simon Moores recently pointed out:

    “There is no doubt that if the US acts now and invests wisely in partnerships, it can catch up, (…) [b]ut it really needs to act now.”

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  • Metals in the Spotlight – Aluminum and the Intersection between Resource Policy and Trade

    While specialty and tech metals like the Rare Earths and Lithium continue to dominate the news cycles, there is a mainstay metal that has – for good reason – been making headlines as well: Aluminum. 

    Bloomberg recently even argued that “Aluminum Is the Market to Watch Closely in 2019.” 

    Included in the 2018 list of 35 minerals deemed critical to the United States national security and economy, aluminum is the No. 1 material by annual DoD usage, and a shortage of aluminum metal was cited in a nonclassified defense study as having ‘already caused some kind of significant weapon system production delay for DoD.’ 

    The U.S. is home to significant bauxite deposits, from which aluminum is sourced, but we import a significant percentage of the aluminum consumed domestically.  Unlike with other metals and minerals, however, this represents a marked decrease in geopolitical risk, as most of our aluminum imports are sourced from one of our closest trading partners, Canada, which accounted for 56% of total aluminum imports from 2013-2016.

    While viewed in isolation and from the upstream end of the supply chain at the minesite, the U.S. is increasingly import-dependent for the aluminum it needs, but viewed in the context of an integrated North American supply chain between the United States and Canada, our neighbor to the North is helping the U.S. close a significant domestic production shortfall.

    Thus, many were startled by the Administration’s decision earlier last year to impose trade tariffs on Canadian-made aluminum and steel under Section 232 of the 1962 Trade Expansion Act.

    Followers of ARPN may recall that the USMCA, the new U.S.-Mexico-Canada trade deal to replace NAFTA struck in November 2018, had opened a window to drop these tariffs on steel and aluminum imports from Canada and Mexico, which stand in the way of a fully integrated North American defense supply chain and, particularly with regards to Canada, “ignore nearly 80 years of deep defense cooperation with our northern neighbor.”

    Unfortunately, the provision remained intact in the November agreement, prompting more than 45 groups representing a wide range of business sectors to renew their call for an end on the Section 232 tariffs in 2019.  In a coalition letter sent to U.S. Secretary of Commerce Wilbur Ross and U.S. Trade Representative Robert Lighthizer last week, the signatories argue that

    “for many farmers, ranchers and manufacturers, the damage from the reciprocal trade actions in the steel dispute far outweighs any benefit that may accrue to them from the USMCA. The continued application of metal tariffs means ongoing economic hardship for U.S. companies that depend on imported steel and aluminum, but that are not exempted from these tariffs. Producers of agricultural and manufactured products that are highly dependent on the Canadian and Mexican markets are also suffering serious financial losses.”  

    Meanwhile, on Capitol Hill, a bipartisan group of lawmakers are preparing draft legislation to strip the Administration of the tool it used to impose the above-referenced tariffs, which it is considering to use to implement further duties on car and car part imports.  

    According to Politico, the Bicameral Congressional Trade Authority Act, the draft bill’s working title, would strip the president of the unilateral power to “make a final determination on whether to levy import restrictions if a Commerce Department analysis determines that foreign imports are undermining U.S. economic interests in a way that poses a threat to national security,” by requiring congressional approval of any such tariffs proposed under Section 232.  If passed, the legislation would also require a retroactive vote to approve any tariffs imposed under Section 232 within the last four years — including the ones on aluminum and steel the USMCA negotiators failed to strike. 

    With the tariffs removed, the November USMCA agreement could well become a springboard to take the strategic North American alliance to a new level.”  

    Here’s hoping Washington will not fail America.  

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  • Trade Patterns May Stay, but Manufacturers and Consumers to Bear the Brunt of Current Tensions Over Aluminum and Steel

    A recent Bloomberg story we featured last week put a face on the specter of trade war over aluminum and steel, and retraced the history of this symbiotic U.S.- Canadian trade relationship and what our very own Dan McGroarty has called the “world’s most integrated defense industrial base.”   Digging a little deeper, a new Wall [...]
  • Arvida, Quebec – Putting a Face on the Specter of Trade War Over Aluminum and Steel

    Last month, our very own Dan McGroarty argued in a piece for Investor’s Business Daily that the escalation of the trade war over U.S.-imposed trade tariffs on Canadian made aluminum and steel has serious implications not only for our economy, but also for the U.S. defense industrial base.  In it, he outlined the genesis of [...]
  • McGroarty for IBD: “Subjecting U.S. Aluminum Access to Trade Tensions with Canada National Security Crisis Waiting to Happen”

    Against the backdrop of the recent escalation of the U.S.-Canada trade war, ARPN’s Daniel McGroarty argues in a new piece for Investor’s Business Daily that while “the focus has been on U.S.-imposed trade tariffs on Canadian-made aluminum and steel, and their economic impact,” the “damage the tariffs may do to the U.S. defense industrial base” [...]
  • Through the Gateway: “Fairy Dust” Supply Woes Loom

    As we continue our look Through the Gateway, comes a stern reminder by way of Canada that the geopolitics of resource supply represents a complex issue warranting comprehensive policy approaches.   And it literally concerns a metal that touches us — more precisely, we touch it — every day, too many times to count. A decision to [...]
  • Through the Gateway: Aluminum – Fueling the Renaissance of American Manufacturing

    Aluminum is not only one of the most sustainable materials these days, it is also making headlines – most recently during the North American Leaders Summit, also dubbed “Three Amigos Summit” held at the end of June in Ottawa, Canada.  Invoking challenges associated with China’s trade policy, President Obama called for the North American countries to [...]
  • McGroarty/Reaugh: Time to Do Away with Uptick Rule to Unleash Canada’s Resource Sector

    The new year typically is the time for people to reflect on the preceding twelve months and make resolutions for the new year.  In an exclusive to the Vancouver Sun, our very own Daniel McGroarty, who serves on the advisory board of mining company American Manganese, joins ARPN expert and CEO of American Manganese, in reviewing 2015 as [...]
  • Strategic mineral issues debated in Toronto

    Early this week, strategic mineral experts gathered in Toronto, Canada, for the second annual Technology Metals Summit hosted by our friends at ProEdgeWire. We were honored that our very own Daniel McGroarty and several other American Resources experts were included in the impressive lineup of distinguished speakers. According to ProEdgeWire publisher Tracy Weslosky, the conference [...]
  • Fraser Institute to host third Mining Business Risks Summit in November

    The Fraser Institute, Canada’s leading public policy think tank and the intellectual home for three of our policy experts, has teamed up with CRU Group, the leading independent business analysis and consultancy group focused on metals and mining, again to host their third Mining Business Risks Summit, to be held in Toronto, Canada, 1-2 November [...]

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