To: KyrosL who wrote (66364)	9/23/2010 6:34:55 PM
From: TobagoJack	Read Replies (2) of 162232
full trade war will see the destruction of the global middle class, a class that is the minority in china and the majority everywhere else life is not just about rocks in full trade war, hk would make out like a bandit, running trades in full trade war, europe, russia, and china would opt out, japan must choose its new destiny, india can do whatever, canada would not participate, and usa would be very much alone who needs a deadbeat debtor as a trade partner anyway? my read of the situation, pulling back via fractal math to appreciate the full splendor, is that: - team usa is stirring the pot unbecomingly to forestall the return of a world power to its seat at the head table after 6 hundred years absence - team china, as did team usa, will tend to make own rules - as long as team china, usa, and russia playing for self and distinct interest, china can face down usa as it had plenty of times from much weaker positions - team usa engaging with china periphery of asean is not of consequence (all too small and disorganized) but interesting to watch - team usa engagement of india is also not of consequence (that mountain is high, and cutting off water [link is added today to a. post 10-years young eurasiantimes.com as refresh of the thoughts back when, ten years and three dams later] is simpler than choking off rare earth) but interesting to watch - team japan must soon choose its destiny - all of team usa' efforts going forward must be on borrowed money, and must fund all efforts above the burden willingly accepted by all players, including creditors and would-be creditors - soon enough russia should recognize an opportunity, and europe should realize a danger - iow, the game is on, and both japan and usa must print alongside china, and china must print so that it can grow, reform, and be stable - above be my simplistic read of situation w/o benefit of knowing details of sterilization and repos and swaps and such - in the mean time, am ramping to renovate abode of in-laws starting march 1st, and am wondering if i should hoard some sony tv flat screens before they run out of components recommendation, getyourfavoritebasketofmetals

China’s rare earth exports to the US could fall by a third as global demand drops 5 per cent this year amid coronavirus, analysts say

‘As a major consumer of China’s lanthanum, the US oil refining industry is leading the demand fall,’ says Adamas Intelligence managing directorThis year has seen a large decline in demand for rare-earth magnets as the pandemic has crushed demand for things like electric cars and smartphones

China's rare earth exports plunge 69.1% in July, disrupted by COVID-19

On Rare Earths, the Pentagon Is Making the Same Mistake Twice

Hunter Biden's deals 'served' China and its military, new documentary claims

RARE Act aims to eliminate mineral dependency on China

China’s sovereign digital currency plans must be globally compatible to internationalise the yuan, analysts say

The ‘interoperability’ of the digital yuan with international payment systems and other central bank digital currencies will determine its use abroadThere is a sense of urgency to promote greater use of the yuan to help China offset threat of worst-case US sanctions that could cut it off from dollar payment system

https://www.bloomberg.com/news/articles/2020-09-04/u-s-europe-face-hurdles-to-cut-china-reliance-for-rare-earths?sref=Jsv6y4eP

U.S., Europe Face Hurdles to Cut China Reliance for Rare Earths

Joe Deaux
5 September 2020, 02:09 GMT+8
Supply Lines is a daily newsletter that tracks Covid-19’s impact on trade. Sign up here, and subscribe to our Covid-19 podcast for the latest news and analysis on the pandemic.

The U.S. and Europe’s ambition to boost production of rare raw materials used in electric vehicles and wind turbines and reduce dependence on China will face obstacles, including higher costs and environmental concerns.

Two U.S. Congressmen this week introduced bipartisan legislation aimed at reducing dependence on China for rare earths, similar to what Senator Ted Cruz introduced in May. The European Union stepped up a push to become less reliant on imported raw materials, with the European Commission vowing to create a raw-materials alliance by the end of the year due to their importance in growing industries.

Concern about the outsized influence of China gained more prominence as trade tensions increased between the U.S and China. Cost, access to the raw materials and environmental concerns may be the biggest stumbling blocks for creating an independent supply chain, according to analysts.

See more: Lawmakers Seek to Curb U.S. Reliance on China for Rare Earths

“It’s very difficult to sustain, it’s expensive to sustain,” said Jennifer Bisceglie, the chief executive officer of Interos, a supply-chain risk management company. “If you create an entire local supply chain, think about the expense in training the labor and getting the raw materials if they’re not in your country.” Large multinational corporations rely heavily on smaller suppliers who have access to localized raw materials they might not be able to get elsewhere, she said.

China accounted for 80% of total U.S. imports of rare-earth compounds and metals last year. President Donald Trump ordered the U.S. Defense Department to spur production of rare-earth magnets as the trade war between the two countries sparked concern China will restrict exports of the products.

Tax Incentives

The bills introduced in the U.S. House and Senate offer tax incentives, which would make the domestic industry more competitive, according to Hu Yan, an analyst with SMM in Shanghai. Still, it will take time for countries to build up technology and equipment locally and environmental hurdles are higher for mining and exploration, which can cause significant damage. Yan said the U.S. -- which is rich in rare-earth resources but has high production costs including labor and energy -- needs to weigh those environmental costs against the benefit of an onshore industry.

Europe’s plan is coming in for criticism from groups who say it focuses too much on mining and not enough on recycling. While officials across Europe and the U.S. may be hoping to end dependence on China for the raw materials, executives at rare earth miners say they only need to gain a portion of the market to incubate successful domestic industries.

See more: Europe Pledges Push to Cut Reliance on Imported Raw Materials

“It doesn’t need to be the entire industry, it just needs to be some significant part of the supply,” said Jim Litinsky, the incoming CEO of MP Materials, the lone miner of rare earths in the U.S. “As long as there are one or a handful of major Western competitors that keeps the entire supply chain honest and shields us from getting squeezed.”

MP Materials has to ship its raw materials to China for final processing because it’s the only nation with refining capabilities. If the U.S. and other countries bring production back home and cut China’s share down to 60% of the supply chain, China won’t have that kind of control anymore, Litinsky said.

“In general discussions even about two years ago, people were saying ‘free trade is going to solve everything - what’s the big problem?’,” Mikael Staffas CEO & President of miner Boliden AB, said by phone. “There’s always the world market, where we can buy whatever we want. I think that mindset has changed very quickly -- I think we’ve become more and more aware that that might not always be true.”

Diversification

Encouraging diversification of supply chains is smart and makes sense, said Lewis Black, the chief executive of Almonty Industries Inc., which produces the rare metal tungsten. Black said the right amount of federal support might be a good solution, otherwise companies will keep relying heavily on China.

Moving supply chains is also easier said than done, especially when someone else can do it at a cheaper cost. Black said Chinese companies are “incredibly good” operators, and can build up stockpiles without the fear that their balance sheets will take a hit with the devaluation of the inventory. For most buyers, the lowest cost may still outweigh the location from where they purchase.

When buyers “have nowhere else to go, they have to go to China. It’s like having one more fix and then saying they’re going to get right on it,” Black said.

— With assistance by Isis Almeida, Winnie Zhu, Jonathan Stearns, and Libby Cherry

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