LYC (ASX) China/US Trade War

Originally posted by Neoarchean: ↑

China--Making REE more rare--US bear cost trade war

China wants US to bear the cost of trade war by making rare earths more rare
Published time: 8 Aug, 2019 09:37Edited time: 8 Aug, 2019 10:09

FILE PHOTO: Soil containing rare earth elements, Jiangsu province, China © Reuters
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China’s rare earths association has warned that the trade conflict with the US will harm American businesses and consumers, as it confirmed its readiness to weaponize the prized elements.
Rare earth elements are critical for the high-tech industry in the manufacture of everything from mobile phones to modern fighter jets.

The Association of China Rare Earth Industry (ACREI), comprising almost 300 miners, processors and manufacturers, held a special meeting earlier this week, just several days after US president Donald Trump threatened to hit Beijing with a new batch of tariffs.

In a statement issued on Wednesday, the association called Washington’s tariffs policy“trade bullying”aimed at suppressing China’s development. “We express our firm opposition"to it, it said, adding that Chinese rare earth companies should actively expand both foreign and domestic markets.

While the ACREI acknowledged that are no winners in a trade war, it warned that American citizens and businesses will fall victim to the conflict between the world’s two biggest economies.

“The cost of tariffs imposed by the United States should be borne by the US market and consumers,”the statement read.

The rare earths association’s comments add to earlier hints by Beijing that it could impose restrictions on the exports of the materials. The fears were triggered by Chinese President Xi Jinping’s visit to a rare earths facility in Jiangxi in May, after which local media reported that the Chinese government is ready for the export ban.

Such a move could be painful for the US, which mostly relies on China for supply of the materials which are necessary for production of high-tech devices and for military use. In an apparent bid to secure the supply of the vital elements, the Pentagon asked US miners last month to report on their production capabilities and come up with plans to develop the industry.

China accounts for more than 80 percent of the global of rare earths supply and the exports are already falling. In June, it exported 3,966 tons of the materials, which is 26.8 percent less that at the same period last year.

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If China rolls into Hong Kong, forget about any progress in the trade war for an extended period of time. Potential for Tiananmen Square redux?
Expect the US to take action to make China "pay" the price and for China to retaliate--rare earths? And expect a dramatic impact on the global economy--recession? Such action would profoundly impact global markets as Hong Kong is the world's number three financial center. I've added to my gold/gold miners ETFs.

https://www.scmp.com/news/china/society/article/3022479/chinese-armed-police-truck-convoy-rolls-city-near-hong-kong

Impact on Lynas? Even with recession, there still will be demand for rare earths and if China cuts off/reduces effort bullish for Lynas and for US to develop its own industry probably kicks into uber-high gear.

https://www.investopedia.com/articles/investing/030116/top-three-financial-centres-world.asp

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