As the trade war rages, China might leverage its abundance of rare earth minerals aa secret weapon to counter the effects of tariffs from the United States.
The United States has acknowledged this possibility and The Pentagon recently said that it is seeking more funds in order to minimize the country's reliance on China's raw materials. Pentagon Spokesperson Air Force Lieutenant-Colonel Mike Andrews said, "The department continues to work closely with the president, Congress, and the US industry to improve US competitiveness in the mineral market."
The Chinese media first introduced the idea that the rare earth might be used as a weapon for the escalating trade conflict between China and the United States. The speculations started when Chinese President Xi Jinping visited a rare earth factory that makes magnets in Jiangxi province.
Lu Kang, China's foreign ministry spokesman, said at a regular news briefing that an early warning by China's top planning agency on rare earth exports was sound and valid. The country's National Development Reform Commission said in a statement that while China followed strict principles in its development of rare earth, the domestic industry would get supply priority.
The People's Daily, a state-run new network, said in a commentary that the Chinese people would never agree to the United States using products made from rare earth exported from China to curb and suppress China's development. The commentary also said that the United States should be reminded not to underestimate China's ability to defend its rights to development and to remember not to blame anyone for not warning them.
According to Li Ming Jiang, China program coordinator at the S. Rajaratnam School of International Studies in Singapore, China's current objective is to put pressure on the US for more American concessions in the trade talks and compel the US to be less harsh on Huawei and other Chinese tech companies.
Huawei's trouble with the United States started with the accusations of Cisco that Huawei is stealing intellectual property. The company is also accused of espionage, stealing trade and national security data for China.
United States Secretary Mike Pompeo said when he was asked about the threat of rare earth that the Americans have already "lost and suffered for decades under the current rules" and that the President's "singular focus is to push back" on China.
He also said that if it's the case that the Chinese Communist Party wanted to get information from technology that was in the possession of Huawei, it is almost certainly the case that Huawei would provide that to them.
According to 2014 University of Texas professor Eugene Gholz's report, ultimately, concentrated rare earth supply in China had limited economic and political effects.
