China has just halted the export of some rare earth metals to the US, NYT reports.”The embargo is expanding” beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities. They said Chinese customs officials imposed the broader shipment restrictions Monday morning, hours after a top Chinese official had summoned international news media Sunday night to denounce United States trade actions.
This action — which China has not admitted — could represent economic blackmail for numerous economic complaints, including pressure to revalue the yuan and to cut unfair subsidies for Chinese clean tech.
China had already said it would reduce rare earth exports by 72 per cent for the second half of the year.
America can respond in kind, or it can petition international authorities like the WTO. Again.
Of course there’s one reason not to freak out — those high tech products that need rare earth metals, like iPhones, are already made in China and exported to the US. This scenario will continue.