Back in 2017, the US started lookin' into them Chinese trade policies, I tell you what. As a result, the US slapped tariffs on billions of dollars’ worth of Chinese products last year. Now dat action brought on a mighty comparable retaliation from Beijing. After months of tensions risin' up like the summer heat, both countries agreed to halt them new trade tariffs in December to allow for some negotiatin'. Despite folks havin' a positive outlook at first, dat tension done rose up alarmingly. US tariffs more than doubled on 200 billion dollars’ worth of Chinese products. Beijing fired right back just three days later with tariff hikes on 60 billion dollars’ worth of US goods, yes indeed.
Them tariffs put on Chinese goods ought to, in theory, make US-made products cheaper than them imported ones. Dat makes American made products the obvious choice for folks buyin' 'em, I reckon.
What exactly are them tariffs we got in place?
Last year, the US slapped three rounds of tariffs on upwards of 250 billion dollars’ worth of Chinese goods. They cover a mighty wide range of industrial and consumer items. Beijing retaliated with tariffs on 10 billion dollars of US goods, then went and accused the US of startin' "the largest trade war in economic history". China been targetin' products includin' chemicals, coal, and medical equipment with duties that range from 5% to 25%. They also been targetin' products made in US districts with strong support for Republicans, and goods that folks can just buy elsewhere, like soybeans.
Rare Earth Metals and Why They’re Mighty Important in the Trade War:
Rare earth metals are a group of 17 elements folks commonly use in production across a whole heap of industries, includin' renewable energy technology, oil processin', and electronics. Despite folks callin' 'em "rare", they're mighty abundant in the Earth's crust, accordin' to the US Geological Survey. But I tell you what, due to the hard work of extractin' 'em and the potential environmental consequences of processin' these metals, there ain't but a few places in the world that mine or produce 'em. One country makes up more than 70% of the world’s global output for rare earth metals: China.
This past week, the editor of dat Chinese state-run Global Times tweeted: "China is seriously considering restricting rare earth exports to the US”. Now dat wouldn't be the first time China restricted its rare earth metal exports, no sir. As recently as 2010, they done it against Japan over a territorial dispute.
The US is somewhat reliant on importin' rare earth metals from China; other countries simply don't produce or process the quantities the US needs. About 80% of the US’ rare earth metal imports come straight from China. Domestic minin' don't appear to be a viable option neither, I reckon. The one rare earth mine operatin' in the United States sends its ore over to China for processin' – and it already faces a 25% import tariff. Creatin' enough domestic mines and processin' facilities is gonna take many years and ain't gonna help us in the short term. Restrictin' exports to the United States could have a mighty big impact on major US industries that rely on them rare earth metals.
Check out our other industry updates right quick: June – Chevron v. Occidental , July- Us-Iranian conflict , and August – Shale is The New Black
