News Before It's News
About us | Ocnus? |

Front Page 
 Dark Side
 Defence & Arms
 Light Side

Business Last Updated: Jul 14, 2018 - 10:59:11 AM

Trade War With China Exposes U.S. Mineral Import Problem
By Jude Clemente, Forbes, Jul 11, 2018
Jul 13, 2018 - 9:01:31 AM

Email this article
 Printer friendly page

After Trump slaps tariffs on $34 billions on Chinese goods and after China answered with tariffs on $34 billions on US products, economists fear that China and USA be engaged in a full blown trade war.


On July 6, additional Chinese tariffs came on nearly $35 billion of U.S. products in retaliation to U.S. tariffs on an equal value of Chinese exports. Indeed, a heightening trade war with China is once again exposing a very dangerous energy and national security vulnerability for the U.S.: the need to import high levels of critically important minerals. In fact, of the 90 mineral commodities that our U.S. Geological Survey tracks, we are more than 50% import reliant for 50 of them and 100% import reliant for 20, including very important rare earth elements. This 250% increase in 60 years shows how badly our mineral supply chain needs rebuilt.

This import dependency is a massive hole in the U.S. energy security apparatus that needs plugged immediately. From the lithium-ion batteries used for electric vehicles, computers, and cell phones to building solar panels and wind turbines, such resources are essential to our current and future energy systems. We've been spending $7-8 billion a year on imported minerals, and future expenses can only go higher as their strategic value widens. "U.S. energy security begins at home."

And you guessed it: China has actually become our largest supplier. Not necessarily producing loads at home, China’s trick is to control the supply chains of increasingly essential minerals - more strategic thinking by a 5,000 year-old civilization, I'd argue is best symbolized by The Great Wall itself.

For example, consider China’s grip on the lithium needed for batteries. A single Chinese company, Tianqi Lithium, now has "effective control over nearly half the current global production of lithium." Next comes cobalt, “a key ingredient used in the lithium-ion batteries that continue to proliferate across a variety of markets.” Although DR Congo extracts over 60% of the world’s cobalt (illegally using child labor), "China, despite having no cobalt resources of its own, is responsible for 80% of the world’s cobalt chemical production."

Indeed, "There’s a Global Race to Control Batteries—and China Is Winning," investing in resource-rich, waiting-to-be-devleoped Africa in particular. A $60 billion infusion alone to help expand the the African continent's "economic capacity." Just another example of how The Party bases friends on their ability to provide.

And we know that China's strategic resource thinking centers on stockpiling as many of the world riches as possible. In 2012, the Obama administration filed a case with the World Trade Organization against China’s hoarding of rare earths, which ultimately led China to drop export quotas in 2015. Again, given “Trump Says Tariffs on Chinese Goods Could Exceed $500B,” China has all the cards to restrict supply once again. The Party knows it has the option to wait, either capitalizing now or in the future.

But perhaps worse than hampering our energy transition, the U.S. import reliance on these increasingly strategic resources is also a clear national security threat. The Department of Defense uses 750,000 tons of minerals each year and more and more of them are coming from foreign nations. Unsurprisingly, the only U.S. rare earth mine Mountain Pass in California, went bankrupt in 2015 and was bought by a Chinese-led consortium last year.

China, of course, currently produces more than 90% of the world’s supply of rare earth materials and obviously prioritizes its own domestic customers. Defense wise, rare earths are vital to the sophisticated technologies that our Military increasingly depends on to keep us safe, such as missile guidance and control systems, disk drive motors, lasers, satellite communications, radar, night vision googles, armored vehicles, and other essential equipment.

This is really scare stuff: the ability to hoard these rare earths explains “How China can win a trade war in 1 move.”

Our heavy import dependence is a great vulnerability of our own making: the USGS reports that we have $6-7 trillion in minerals reserves. Simply put, our mine permitting process is broken. It can take over a decade for approvals, or five times longer than it takes in Australia or Canada, where environmental standards are just as high.

The U.S. shale oil and natural gas revolution since 2008 demonstrates how quickly we can grab control of our own natural resource future, with our goal for policies to support constantly evolving technologies. There's no reason why our mineral supply system shouldn't be allowed to follow suit.

Fortunately, the Trump administration seeks to change our surging import reliance on these materials, signing an executive order to expand critical minerals production. And as summed up by retired U.S. Army Brig. Gen. John Adams, now under consideration for possible "inclusion in the National Defense Authorization Act is an amendment from Rep. Mark Amodei, R-Nev., that would bring commonsense reform to mine permitting....With national security at risk, the time for action is now."

Source:Ocnus.net 2018

Top of Page

Latest Headlines
Turkey: Worrying Rise in Short-term Debt, Unemployment Rate
How Russia Sank Billions of Dollars Into Venezuela Quicksand
Algerian visa scandal whistleblower's citizenship revoked
Capital outflow from Russia doubles since beginning of 2019, exceeds $ 18 billion
Developing countries are bad at collecting taxes. What can help
Eurozone delays Greece debt relief over household insolvency law
The EU’s digital tax is dead, long live the OECD’s plans
If Trump blows up NAFTA, he’ll blow up his reelection
Alexandria Ocasio-Cortez and the Myth of American Innovation
Trump and GOP burned to the ground by Paul Krugman for their economic ‘ignorance’ that is crippling the country