minerals

As the presidents of China and the US meet in South Korea, Zongyuan Zoe Liu at the Council on Foreign Relations says China may offer concessions on its rare earth minerals.

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Since coming back to the White House earlier this year, President Donald Trump has made rare earth minerals one of his top priorities.

He’s focused on securing enough supply for the United States economy.

In March, Trump went as far as signing an executive order, where he invoked wartime powers to increase the production of rare earths.

And this week, he signed several agreements with a number of Asian countries, in the hopes of gaining access to the minerals.

This is all to counter China’s global dominance in this sector and Beijing’s recent restrictions on rare earth exports.

So, why are these minerals so crucial for the US economy? And can Trump break China’s monopoly?

Presenter: Bernard Smith

Guests:

Brian Wong – Assistant Professor in Philosophy at the University of Hong Kong.

Gracelin Baskaran – Mining Economist and Director of the Critical Minerals Security program at Center for Strategic and International Studies.

Huiyao Wang – President and Founder of Center for China and Globalization.

Oct. 20 (UPI) — Australian Prime Minister Anthony Albanese and U.S. President Donald Trump on Monday signed a “framework” of an $8.5 billion deal for projects involving critical minerals and rare earth elements during a meeting at the White House.

The two leaders, along with their aides, met for lunch in the Cabinet Room, where they also discussed military and other trade issuses.

Because of restrictions on Chinese exportrs to the United States, this gives an opportunity for Australia, which has the fourth-largest reserves of the minerals and elements. They are found in Western Australia, the Northern Territory and South Australia.

Rare earth minerals are a group of 17 elements crucial for electronics, including for the defense industry. Though they are called rare, many aren’t scare, including cerium, used for automotive catalytic converters and petroleum refining, which is more common than copper.

June 7 (UPI) — China has agreed to fast-track approvals for the shipment of rare earth minerals to the United States and some European Union nations.

U.S. President Donald Trump and Chinese leader Xi Jinping spoke Thursday about easing trade tensions.

On Saturday, China’s Minister Seceary Wang Wentao said his nation is “willing to establish a green channel for qualified applications to speed up approval.” Details weren’t given, including the speed of the process and which EU nations are included.

China controls 90% of the global processing of rare earth minerals. Major deposits also are found in the United States, Australia and Russia. Smaller amounts are in Canada, India, South Africa and Southeast Asia.

Rare earth minerals are in the Earth’s crust, making them difficult to extract. They include lanthanide, scandium and yttrium, all on the Periodic Table of Elements. Some major minerals that contain rare earth elements are bastnasite, monazite, loparite and laterite clays.

The first rare-earth mineral was discovered in 1787 — gadolinite, a black mineral composed of cerium, yttrium, iron, silicon and other elements.

U.S. needs rare earth minerals

The minerals are critical to American industries and defense, including use in cars and fighter jets. Batteries contain the minerals

Trump posted on Truth Social on Thursday “there should no longer be any questions respecting the complexity of rare Earth products.”

On April 29, the United States and Ukraine created a Reconstruction Investment Fund that includes rare earth mineral rights in the European nation. Trump and Ukrainian President Volodymyr Zelensky were originally set to sign the minerals deal on Feb. 28, but the plan was scrapped after a tense exchange between them in the Oval Office in which Trump accused him of “gambling with World War III.”

The United States wants access to more than 20 raw materials in Ukraine, including some non-minerals, such as oil and natural gas, as well as titanium, lithium, graphite and manganese.

The Chinese commerce ministry confirmed some applications have been approved without specifying industries covered.

Some Chinese suppliers have recently received six-month export licenses, the American Chamber of Commerce in China said Friday, but it noted that there is a backlog of license applications.

In a survey of member companies conducted by the American Chamber of Commerce in China late week, 75% say their stock would run out within three months, CNN reported.

Jens Eskelund, the chamber president, said member companies were “still struggling” with the situation.

“I hadn’t realized just how important this rare earth card was before. Now the U.S. side is clearly anxious and eager to resolve this issue,” he said a video on Thursday. “But of course, we’ll link this issue to others — the U.S. is restricting China on chips and jet engines, then China certainly has every reason to make use of this card.

“As for whether China will change its rare earth export control policy, that probably still needs to be negotiated in more detail,” Jin added.

Trump said Xi and himself “straightened out” some points related to rare earth magnets, calling it “very complex stuff.”

The U.S. federal government said China had reneged on its promise made in Geneva on May 12.

Delegations from Beijing and Washington plan to meet in Great Britain on Monday for trade negotiations.

At the height of tariff war, China had imposed export restrictions on some minerals on April 4. Trump two days planned a 120% “reciprocal” tax on top of 25% levy on Chinese goods.

But one week later it paused the bigger tariffs, including on other countries for 90 days.

European nations’ needs

China’s commerce ministry pledged to address the EU’s concerns and establish a “green channel” for eligible applications to expedite approvals. He went to Brussels, Belgium, earlier this week and met with European Union’s trade commissioner, Maros Sefcovic.

It’s a problem for China and the EU.

Sefcovic said the pause was slowing deliveries for manufacturers of a wide range of items from cars to washing machines.

Wang urged the EU to “take effective measures to facilitate, safeguard and promote compliant trade of high-tech products to China.”

On Friday, the European Chamber, a Beijing lobby group, warned progress had “not been sufficient” to prevent severe supply chain disruptions for many companies.

United States President Donald Trump has accused China of violating an agreement to mutually roll back tariffs and trade restrictions for critical minerals, as he suggested China was in “grave economic danger” until he agreed to cut a deal earlier this month.

Posting on his Truth Social platform on Friday evening, Trump said he made a “fast deal” with China for both countries to back away from triple-digit tariffs for 90 days to “save” Beijing from a “very bad situation”.

The US leader said his tariffs of up to 145 percent on Chinese imports had made it “virtually impossible” for China to trade with the US market, resulting in closed factories and “civil unrest” in the country.

“China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!” Trump added.

Trump did not specify in his post how China had violated the agreement – made following trade talks in Geneva, Switzerland, in mid-May – or what action he planned to take at their alleged failure to comply with its terms.

Asked by reporters about the China deal later on Friday in the Oval Office, Trump said: “I’m sure that I’ll speak to [China’s] President Xi [Jinping], and hopefully we’ll work that out.”

Trump’s deputy chief of staff, Stephen Miller, told reporters that China’s failure to fulfil its obligations “opens up all manner of action for the United States to ensure future compliance”.

Miller added that Trump hoped China would open up to American business in a similar manner to the way the US has been open to Chinese business “for a very long time now”.

China’s embassy in Washington said Beijing has maintained communication with its US counterparts since the Geneva talks, but said they had concerns about recently imposed US export controls.

“China has repeatedly raised concerns with the US regarding its abuse of export control measures in the semiconductor sector and other related practices,” embassy spokesperson Liu Pengyu said in a statement.

“China once again urges the US to immediately correct its erroneous actions, cease discriminatory restrictions against China and jointly uphold the consensus reached at the high-level talks in Geneva,” Liu added.

Broken promises

Earlier this week, media reports suggested the Trump administration had ordered US firms offering software used to design semiconductors to stop selling their services to Chinese groups.

On Wednesday, a spokesperson for the US Department of Commerce confirmed that it was reviewing exports of strategic significance to China, and “in some cases … suspended existing export licences or imposed additional licence requirements while the review is pending”.

On Friday, shortly after lamenting China’s lack of compliance with the Geneva agreement, President Trump also announced plans to increase tariffs on foreign imports of steel from 25 percent to 50 percent on June 4.

The agreement two weeks ago dialling back tariffs for 90 days prompted a massive rally in global stocks, as it effectively lowered the US tariff rate on Chinese goods to the mid-teens from about 25 percent in early April.

As part of the deal, China also agreed to lift trade countermeasures restricting exports of critical metals needed for production by US semiconductors, electronics and defence industries.

But Trump administration officials have publicly stated that China has been slow to adhere to their Geneva commitments and have so far failed to comply.

The Reuters news agency also reported on Friday that global auto executives are sounding the alarm on a looming shortage of rare-earth magnets from China that could force car factories to close within weeks.

“Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras,” the Alliance for Automotive Innovation said in a letter to the Trump administration.