Despite the earlier relaxation of exports of rare earth metals to the USA in early October, the Chinese announced that the restrictions would return from November 8, i.e. from the end of the customs truce. In response, Donald Trump threatened that all Chinese exports to the US would be subject to additional tariffs of 100%. if Beijing does not withdraw from this step.
The topic of raw materials was discussed last weekend during talks in Kuala Lumpur, which constituted the fifth round of trade negotiations between the US and China. Washington announced success, but the Chinese side treats these declarations with reserve, pointing to the US's lack of readiness to make concessions, reports Interia.
Read also: Trump outlines demands for China before resuming trade talks
TACO effect. Donald Trump usually relents at the last minute
The meeting between US President Donald Trump and the Chairman of the People's Republic of China, Xi Jinping, is scheduled to take place on Thursday, on the sidelines of the APEC summit in South Korea.
“The Chinese decided to play hard before the meeting in South Korea. They would show most of their strong cards to scare Trump, counting on the so-called TACO effect, i.e. Trump Always Chickens Out,” explains Dr. Michał Bogusz, an expert at the Center for Eastern Studies, in a conversation with Interia journalists. TACO effect [Trump zawsze tchórzy] is supposed to mean that the US president resigns at the last minutedespite previous, far-reaching threats.
Read also: China is tightening export controls on rare earth metals and battery technologies
Rare earth metals are essential for the production of electronics
Rare earth metals are essential for the production of advanced military equipment, electronics and automotive components such as airbags. China, controlling most of the world's resources of these elements, have a significant impact on industry in many countries.
“In 2020, during his speech, Xi Jinping emphasized that China must take control over key supply chains. He mentioned, among others, rare earth elements,” says Dr. Michał Bogusz in an interview with Interia. He explains that, according to the Chinese leader, this is a way to protect against threats from the West.
Smuggling rare earth metals in China is punishable by death
The role of rare earth metals may be evidenced by the scale of their smuggling from China to the USA. Recently, an attempt to illegally export 25 tons of magnet powder, which was supposed to go to the American company Lockheed Martin, which is subject to Chinese sanctions, was foiled. The material, transported as “tile adhesive”, it could be used to produce parts for up to 500 F-35 fighters.
From this year, rare earth metals smuggling is punishable by death in China.
Read also: “We warned you.” China deals a huge blow to the US. The worst-case scenario is now unfolding
