China keeps control of rare earths despite trading trees with the USA
China keeps control of rare earths despite trading trees with the USA
Hong Kong-Despite a 90-day ceasefire in the trade conflict with the United States, China seems to be its Exports less often to maintain an important negotiating position for future discussions. This happens in the middle of intensive strategic rivalry with Washington.
trade agreements and export controls
meaning of rare earth
magnet from these difficult rare earths are an essential element in many technologies, from iPhones and electric vehicles to high-priced weapon systems such as F-35 fighter aircraft and rocket systems. But the supply of these materials is almost completely controlled by China.
reactions of the US government
US trade officer Jamieson Greer, who freshly returned from the trade talks in Geneva, tried to dispel the concerns about this potential vulnerability. In a Interview with fox news agreed. "Yes, the Chinese have agreed to withdraw these countermeasures," said Greer. "If you don't do that, we face a different situation. But I expect you to do it."
strengthening the export controls
Nevertheless, there is hardly any signs that China will withdraw its newly imposed export controls for rare earths. Experts and industry insiders report that the Chinese authorities strengthen the monitoring and implementation of these controls. The new system, which was introduced in April, does not allow export bans in the actual sense, but requires the government's approval for any delivery. This has led to weeks of delays, since companies had to find their way around in this new regime, which stoked fears in various American industries, including automotive and defense sectors.
economic implications
Gracelin Baskaran, director of the Critical Mineral Security Program at the Center for Strategic and International Studies (CSIS), emphasizes that China's export approval system remains "here" and may last long. This enables Beijing to maintain its negotiating power in future trade talks with the United States. If the United States is changing its customs policy, China could easily hold back the necessary licenses.
new export licenses and surveillance
After the conversations in Geneva, the Chinese Ministry of Commerce 28 US companies deleted from his list for dual-use export controls and 17 American companies from another commercial and investment list. However, there was no mention of changes in export controls for rare earths and magnets.
the future of the US defense company
BASKARAN found that instead of lifting export controls for rare earths China, 28 American companies removed from its export control list. This means that these companies, mostly from the aerospace and defense area, are no longer refused to access dual-use materials from China. It remains to be seen whether Beijing is ultimately awarded licenses to US defense companies. Thomas Kruemmer, director of the Ginger International Trade and Investment company based in Singapore, does not believe that China will move away from this attitude.
geopolitical weapon
China's control over rare earths and other critical materials represents a geopolitical pressure. According to the international energy agency, China accounts for 61% of the global support of rare earth; However, China's control over the processing is an impressive 92%. "China's control over rare earths and other critical materials is a geopolitical weapon of previously unknown effect," emphasized Kennedy. By awarding first export licenses for rare earths to companies such as Volkswagen, China sends a clear geopolitical signal, especially in view of the tense relationships between the USA and Germany.
of this development should follow all actors closely, since it could have both short and long-term effects on global supply chains and geopolitical relationships.
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