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Thursday, 30 May 2019 08:42

The Next Stage of the US-China Trade War

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(Washington)

The next phase of the US-China trade war is coming, and it looks like it may be even worse. At the beginning both sides focused on levying higher tariffs on more goods, then Trump took the step of limiting China’s access to semiconductors with his ban on Huawei. Now the next phase may be much more specific and potentially damaging for the US—China is likely to limit the US’ access to rare earths used to make all kinds of technology devices. Access to such rare earth elements is one of the biggest US weaknesses in tech and Beijing has the power to block access because the US imports 80% of its rare earths from China.


FINSUM: It is hard to tell how bad this could be. On the one hand, the total US imports of Chinese rare earths are only $160m, but on the other, if there is not another easy source then it could hamstring the businesses that use them.

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