China Intends to Weaponize Rare Earths

Beijing is gearing up to use its dominance of rare earths to hit back in its deepening trade war with the U.S. A flurry of Chinese media reports last week raised the prospect of Beijing cutting exports of the commodities.

China supplies about 80 percent of U.S. imports of rare earths, which are used in a host of applications from smartphones to electric vehicles and wind turbines.

The threat to weaponize strategic materials ratchets up the tension between the world’s two biggest economies before an expected meeting between Presidents Donald Trump and Xi Jinping at the G-20 meeting this month.

In an editorial in the People’s Daily, the publication warned that the U.S. should not underestimate China’s ability to fight the trade war. The editorial used some historically significant language on the weight of China’s intent.

The newspaper’s commentary included a rare Chinese phrase that means “don’t say I didn’t warn you.” The specific wording was used by the paper in 1962 before China went to war with India, and “those familiar with Chinese diplomatic language know the weight of this phrase,” wrote the Global Times, a newspaper affiliated with the Communist Party.

Source: Bloomberg