May 28, 2019

Why rare earth minerals matter in the U.S.-China trade war

President Trump and Chinese Vice Premier Liu He talk to reporters in the Oval Office. Photo: Chip Somodevilla/Getty Images

Rare earth minerals and elements are necessary components of tech and defense tools, including smartphones, LED lights, wind turbines and nuclear rods. And their critical role in modern manufacturing has turned them into the latest lightning rod in the trade war between China and the U.S.

Driving the news: After President Trump blacklisted Chinese tech company Huawei and threatened to target other Chinese tech firms by disallowing American companies to do business with them, China signaled it could target rare earth minerals.

  • Chinese President Xi Jinping recently visited a key rare earth minerals area of China, analysts say as a symbolic show of force of what the U.S. has to lose if Trump pushes forward with blacklisting.
  • Though the U.S. does have rare earth minerals, the process of mining and refining them is difficult and environmentally dangerous (sometimes releasing radioactivity), so very few domestic facilities exist.

Why it matters: Pushing beyond tariffs and into outright restrictions on trade and international cooperation would take the trade war to a new and more damaging level for individual companies and the stock market.

The big picture: Critics have argued the trade war has been a blessing for China because it has re-focused its business and political leaders on parts of the economy where it is reliant on the U.S. A roadblock on rare earths could prove a similar jolt for American businesses that have long depended on China for essential materials to make their products.

  • This month, a bill was proposed in the Senate that could help spur mining of U.S. rare earth elements and other similar minerals.
  • Enter Blue Line and Lynas Corp, 2 companies hoping to make rare earth mining in America great again by building a plant in Hondo, Texas.

Yes, but: While Trump has been looking to bolster U.S. economic independence, moving away from China will not be easy. As with many industries, China has built an intricate supply chain and has a number of competitive advantages in rare earth mining and export.

  • One big reason Lynas is likely looking to move to the U.S. is its fight with the Malaysian government over environmental conditions and an attempt to force the company to pay for clean-up of a radioactive substance produced in the rare earth mining process.
  • Trump's latest $16 billion farm aid package to farmers show he is willing to spend government money to compensate for trade war casualties, but his ability to further crimp American environmental protection standards may be limited.

Go deeper ... OECD: U.S.-China trade war puts global economy "in a dangerous place"

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New Zealand sets sights on coronavirus elimination after 2 weeks of lockdown

Prime Minister Jacinda Ardern gives a coronavirus media update at the New Zealand Parliament in Wellington. Photo: Mark Mitchell - Pool/Getty Images

AUCKLAND -- New Zealand has flattened the curve of novel coronavirus cases after two weeks of lockdown and the next phase is to "squash it," Professor Shaun Hendy, who heads a scientific body advising the government on COVID-19, told Axios.

Why it matters: The country imposed 14 days ago some of the toughest restrictions in the world in response to the pandemic, despite confirming only 102 cases and no deaths at the time.

Go deeperArrow41 mins ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 2:30 a.m. ET: 1,431,375 — Total deaths: 82,145 — Total recoveries: 301,543Map.
  2. U.S.: Total confirmed cases as of 2:30 a.m. ET: 399,886 — Total deaths: 12,910 — Total recoveries: 22,461Map.
  3. Federal government latest: Acting Navy secretary resigns over handling of virus-infected ship — Trump removes watchdog overseeing rollout of $2 trillion coronavirus bill — Trump said he "didn't see" memos from his trade adviser Peter Navarro warning that the crisis could kill more than half a million Americans.
  4. States latest: California Gov. Gavin Newsom is confident that more than 200 million masks will be delivered to the state "at a monthly basis starting in the next few weeks."
  5. Business latest: America's food heroes in times of the coronavirus crisis. Even when the economy comes back to life, huge questions for airlines will remain.
  6. World updates: China reopens Wuhan after 10-week coronavirus lockdown.
  7. 2020 latest: Polls for Wisconsin's primary elections closed at 9 p.m. ET Tuesday, but results won't be released until April 13. Thousands of residents cast ballots in person.
  8. 1 Olympics thing: About 6,500 athletes who qualified for the Tokyo Games will keep their spots in 2021.
  9. What should I do? Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  10. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Tariff worries hit record high amid coronavirus outbreak

Data: CivicScience, margin of error ±1 percentage points; Chart: Axios Visuals

Concern about President Trump's tariffs on U.S imports grew to record high levels among Americans last month, particularly as more lost their jobs and concern about the novel coronavirus increased.

Driving the news: About seven in 10 people said they were at least somewhat concerned about tariffs in March, according to the latest survey from CivicScience provided first to Axios.