Chinaโs new export controls on rare earth minerals and magnets caused global supply disruptions, pressuring the U.S. to roll back tariffs. The move marks a shift in Beijingโs sanctions strategy, one that is more targeted, legal, and globally impactful, exposing the unpreparedness of Western industries despite their long-standing dependence on Chinese rare earths. Miller writes:
Shortly after Beijing announced new restrictions on exporting rare earth minerals and the specialised magnets they make, the worldโs auto industry warned of shortages that could force factory closures. Chinaโs skilful deployment of rare earth sanctions this spring was probably the key factor in forcing Washington to reverse its tariff rises on the country. […]
The White House thought it had achieved escalation dominance. Its theory was that sky-high tariffs would be so costly that Beijing would have no hope but to negotiate. In fact, Chinaโs leaders could swallow the political cost of tariffs. But Washington couldnโt ignore the loss of rare earth materials and its impact on auto companies.
Why did these sanctions prove so much more effective than prior efforts? Partly because Beijing has been improving its toolkit, building a legal regime to cut strategic exports and improve knowledge of trade partnersโ pain points. […]
Nevertheless, over the decade and a half since China first cut rare earth exports to Japan in 2011, the west has failed to find new suppliers. […]
Manufacturers speak of resilience yet some keep only a weekโs supply of rare earth magnets in their inventories. This is a weapon they have been staring at for decades. They should not have been surprised when Beijing finally pulled the trigger.
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