As the trade war between the US and China escalates, Beijing has suspended the export of several critical rare earth elements, metals and magnets, threatening to choke off supplies to the West of components central to weapons, electronics, automakers, aerospace manufacturers, semiconductor companies and a wide range of consumer goods.
The Chinese government is drafting a new regulatory system for exports, and while the policies are being framed, the shipments of the magnets, essential for the manufacturing of almost everything ranging from cars to missiles, have been halted at many Chinese ports, according to a report by The New York Times.
Per the report, once the new regulatory system is in place, it could permanently prevent supplies from reaching certain companies, including American military contractors.
Beijing placed export restrictions on rare earth elements on April 2 as part of a broader package of tariffs and company restrictions in retaliation for Trump's decision to hike tariffs against most Chinese products to 54 per cent. The export curbs include not only mined minerals but permanent magnets and other finished products that will be difficult to replace, analysts said.
The move, which Beijing had long hinted was possible, further ratchets up trade tensions between the world's two largest economies and leaves American manufacturers scrambling for fresh supplies of the critical minerals they have relied upon for decades.
Now, metals and special magnets made with them can only be shipped out of China with special export licenses, the NYT report said.
