Recently, there is escalation of trade friction between USA and China, in last month, President Trump declared considering of imposing tariff again on 100 billion US dollars of exported commodity from China. While China’s Ministry of Commerce responded that from Chinese side we’ve drawn up a very specific countermeasures and would resolutely take up the challenge. The spokesman from Ministry of Commerce expressed:

With bottom line thinking pattern, we’ve prepared to face further escalated actions from US and already drawn up a very specific countermeasures. The Chinese way of doing things is we won’t provoke incidents but if somebody do it, we will fight back resolutely. The Chinese people have always been serious, and we will definitely do it. 

Will China limit export of rare earth to USA?

Ming Bai, the deputy director of the international market research institute of the international trade and economic cooperation institute of the ministry of commerce, said although there is reservation of rare earth in USA, the demand of imported rare earth materials from China is very big, so we can not exclude the possibility of restriction on export of rare earth materials. But it needs very carefully consideration before move to this step. As expressed by him, if the excuse was made to protect natural resources and environment, it will also limit the consumption of rare earth materials in domestic market, it means this will influence on energies and electronics etc. Industries to some extends.

In addition, as we all know 2012-2014 Japan, America and EU submit an application for arbitration to the WTO on issues of export of rare earth materials, this time if there is a temptation to limit the export again, we need to consider whether it conformed to the related rules of WTO.

What influences will be on USA if China limit export rare earth materials? Mr. Ming Bai thought that although America has rare earth resources of their own, they were not exploited for couple of years, and rely on import mostly. If the limitation is effected, to some extend it will increase the cost of rare earth in US due to bigger difficulties of exploitation in US.

Mr. Chunshen Liu, associate professor of Central university of finance and economy, vice president of research institute of Bluesource capital, expressed, as rare earth has a characteristic “small dosage, big effect”, if US decrease import of rare earth, it will influence lot of industries. So when rare earth materials is limited in exportation, in order to cope solve shortage problem, it will probably switch to Japan or other countries for importation of those materials.

Data from Science and Technology Daily and China environment News.