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Rare Earths Issue Back in the Mix As Trade Tensions With China Escalate

At ARPN, we have long highlighted the inter-relationship between resource policy and trade policy. While more recently, we looked at tensions in our relationship with Canada over tariffs on aluminum and steel, other areas of concern are coming into focus.

Mounting tensions over trade with China have brought the Rare Earths issue, with which ARPN followers will be familiar, back to the front pages of American newspapers.

In a new two-part series for News @ Northeastern, Bill Ibelle argues that Rare Earth Metals are one of the “aces China holds in this high-stakes poker game,” and that U.S. stakeholders would be well advised to consider this leverage in policy considerations.

Citing Northeastern University Distinguished Professor of International Business and Strategy Ravi Ramamurti, an expert in emerging markets, who says that “President Trump says he holds all the cards, but China’s monopoly on rare earths is one of the aces,” Ibelle writes:

“A trade war could prompt China to cut off supplies of rare earth metals to American manufacturers. President Trump has already dragged rare earth elements into the conflict by including them on a list of proposed tariffs announced earlier this month.”

While the tariffs must be considered part of President Trump’s stated – and well-intentioned- goal to decrease U.S. over-reliance on foreign metals and minerals, they are not without challenges. As Ibelle points out:

“Efforts to find a new supply of rare earth metals, or devise technologies that supplant the need for them, are still in the early stages.”

And, as ARPN followers know, China will not shy away from playing politics with its near-total supply monopoly  – and the risk of China cutting off supply for the materials the Trump administration is considering to target with tariffs — including, but not limited to REEs — looms large.

To read Ibelle’s full piece, click here.