In the meantime, China’s new regulatory system could permanently ban those types of supplies from reaching certain companies, including American military contractors, and comes in direct response to U.S. tariffs. Depending on how this pans out, automakers could face problems assembling cars and vehicles that utilize electric motors requiring those magnets in that process, as well as others.
Some U.S. companies have been told that it will take 45 days to issue export licenses before these rare earth metals and magnets would resume shipping to other countries. Much like the COVID-19 pandemic exposed companies like Ford that didn’t stockpile semiconductor chips prior to the start of worldwide supply chain issues, this new export issue could certainly make them regret not doing so, or at least, sourcing materials from other places. Many American companies opt not to stockpile rare earth materials simply because they’re quite expensive, however.
The sooner the West can totally decouple from China, the better in my view.
IXR Price at posting:
0.8¢ Sentiment: Buy Disclosure: Held
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