US-China deal no relief for firms as rare earth curbs keep supply chain severed
When Beijing and Washington announced a 90-day truce in their trade war earlier this week, most companies doing business on both sides of the Pacific let out a sigh of relief. Any reprieve from the triple-digit tariffs that threatened to throttle bilateral trade would be welcome news for the firms who rely on that trade to stay operational.
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But without alterations to export controls on the critical minerals essential to the production of certain goods – the 'rare earth' elements over which Beijing enjoys a near-monopoly in terms of supply and refining capacity – the firms producing those goods in China fear their business will remain endangered.
Those fears could be well-founded. China, the world's top producer of these crucial components for consumer electronics, electric cars and defence systems, has continued to
crack down on smuggling and enhanced its oversight of supply chains despite this week's cool-down.
One US company, which manufactures audio equipment for what it terms 'non-sensitive commercial applications', lodged its concerns in internal documents seen by the Post.
'Delays in export approvals would disrupt our production and adversely affect the production schedules of downstream vehicle manufacturers, including potential production stoppages,' the company said.
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The firm sources magnets – which carry trace amounts of the controlled elements – from China for its plants in Europe and Latin America.
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