Last month, we highlighted how the exclusion of Rare Earths from the list of tariffs to be imposed on Chinese goods released by the Office of the U.S. Trade Representative (USTR) earlier this summer spoke to the growing awareness of their strategic importance in the United States.

However, Rare Earths were not the only items removed from the final list – and what has dropped off the list may tell a more interesting story, than what remains on it. Writes The Wall Street Journal’s Chuin-Wei Yap:

“While the latest broadside from the U.S. in its tariff feud with China, covering 5,745 items worth some $200 billion, is a demonstration of America’s buying power, items cut from the initial tariff hit-list point to weaknesses across a range of businesses, from energy giants like Halliburton Co. to smaller suppliers of specialty parts, all of which sought waivers for raw materials and parts by arguing that China had become an indispensable supplier.”

According to Chuin-Wei Yap, written communication and hearing transcripts relating to corporate lobbying efforts to obtain an exemption “show where the Chinese have become outsize global producers of relatively obscure industrial commodities—on which American industry has become reliant. In some cases, the U.S. companies say, substitute makers in other countries could be found—but were likely to raise price tags on American buyers as these rivals sought advantage in the escalating bilateral standoff.”

Aside from the Rare Earth exemption we discussed last month, Chuin-Wei Yap cites the example of Barite, largely used for weighting agent in fluids used in the drilling of oil and natural gas wells. While U.S. production has been declining, of the roughly 3 million metric tons of Barite used in the U.S, more than 75 percent is imported from China, according to USGS.

As Chuin-Wei Yap points out, there are no immediate indications that China might choke off supply as it did a few years back for Rare Earths, but “the exemptions add to a menu of last resorts.”  He adds that analysts fear that constricting supply may ultimately cross “the line into a ‘hot’ war.”

All the more reason to follow up the release of the Department of the Interior’s list of 35 metals and minerals deemed critical from a national security perspective – which includes both REEs and Barite (but failed to include some other materials as we have discussed elsewhere), with long overdue policy reforms to alleviate domestic resource supply concerns.