i understand that lots of supposedly rare items are not scarce
but i also guess that w/i any moment the scarcity can lead to cardiac event
for it takes time to start mines, and aggregate processing skills, whereas it takes a few trading sessions to cripple a stock market
as escalation continues, should they do so, there would be less and less for one or the other side to go all-in, and depending on which side de-risks by suffering from progressive escalation, the opposing side veers towards cardiac event
a guess
let's watch, could be interesting, and expose much more indubitable opportunities more clearly
at some juncture team china would help team america by charging a border tax for items exported, per trump script
re your tesla short, <<Mitsubishi Chemical America Inc. got an exemption for an obscure class of complex fluorine salts and carbonate esters, which go into the electrolyte for lithium-ion batteries used in electric vehicles including Tesla Inc.’s Model 3 and Chevrolet’s Bolt.
“There simply is no other viable source of these key inputs outside China in the volumes and the quality levels that we require,” Dennis Trice, the company’s president, told a USTR hearing. “Developing new sources outside of China to replace existing production would take massive long-term investments and many years.”
Mr. Trice said his company would have had to reconsider its investments in the U.S., which include a $38 million plant in Tennessee employing 2,600 workers, had it not received the exemptions. Official data show China accounted for 46% of such U.S. imports in the January-July period. Thailand provided 25%, trailed by Mexico, Japan and Germany. Tesla didn’t respond to a request for comment. >>
a cardiac event in fluorine salt would send tesla to zero.
surely you would agree that the theory is worth testing, as a warning shot across the pond, so to speak
wsj.com
U.S. Reliance on Obscure Imports From China Points to Strategic Vulnerability
Corporations gained tariff waivers for raw materials and parts by arguing that China had become an indispensable supplier
Chuin-Wei YapSept. 24, 2018 5:30 a.m. ET
The chemicals, used to make electrolytes for electric-car batteries, are among 297 dispensations sparing importers the new 10% levy. The mineral barite, which helps energy companies drill for oil and gas, and the painkiller ibuprofen—90% of which comes from China—were also beneficiaries, along with Apple’s far-better-known products, including its smartwatches and AirPods.
While the latest broadside from the U.S. in its tariff feud with China, covering 5,745 items worth some $200 billion, is a demonstration of America’s buying power, items cut from the initial tariff hit-list point to weaknesses across a range of businesses, from energy giants like Halliburton Co. to smaller suppliers of specialty parts, all of which sought waivers for raw materials and parts by arguing that China had become an indispensable supplier.
These businesses gained exemptions after intense lobbying by corporate chieftains during six days of public hearings in August and in a flurry of letters to the U.S. trade representative. Nearly 400 top executives showed up for the hearings, and thousands more wrote in; most failed to get exemptions, including giants Walmart Inc. and GE Appliances.
The letters and hearing transcripts show where the Chinese have become outsize global producers of relatively obscure industrial commodities—on which American industry has become reliant. In some cases, the U.S. companies say, substitute makers in other countries could be found—but were likely to raise price tags on American buyers as these rivals sought advantage in the escalating bilateral standoff.
In the case of ibuprofen, chemical giant BASF SE in June halted production at a Texas plant, which analysts say accounted for a sixth of the world’s ibuprofen, citing technical problems. The shutdown sent American pharmacy suppliers rushing for new sources of ibuprofen. Pharmacy suppliers faced looming tariffs on Chinese-made ibuprofen, which would have been substitutes for the BASF-made ibuprofen.
If enacted, “this tariff can cause a shortage of dosage ibuprofen in the domestic market,” said Joseph Mollica, chief executive officer of LNK International Inc., a Hauppauge, N.Y., drug manufacturer that supplies Walmart and Target stores, among others, in a letter to the USTR. “This will not punish China, but will benefit India’s continuing foray into the U.S. market at the expense of U.S. manufacturing jobs.”
BASF said it doesn’t yet have a clear timeline on reopening its plant.
President Trump is girding to broaden the standoff with Beijing, saying his policy curbs Chinese tech theft and underscores how much less China imports from America—a roughly four-to-one imbalance—than the other way around.
Mr. Trump’s tariffs now affect some $250 billion worth of Chinese imports, and another $267 billion is on standby, covering the value of nearly all Chinese imports. Beijing has retaliated on $110 billion, but it has left out items China relies upon, such as semiconductors and crude oil.
A USTR official said it takes into account the likely impact on U.S. consumers and the economy when evaluating exemptions. Commerce Department data show the U.S. is heavily dependent on China also for consumer imports such as luggage, refrigerators and vacuum cleaners. Despite China’s accounting for about 80% of such imports, Washington has gone ahead to tax these products; sellers say it is likely consumers would ultimately bear most of the cost.
China has in the past been swift to sense American reliance on its exports. In 2010, Beijing drastically slashed an export quota on rare earths, a group of minerals essential for making high-tech gadgets like iPhones—a play at using China’s control of 97% of global output to raise prices. The U.S. took China to the World Trade Organization and won. In a signal that such dependence remains high, Washington last week quietly exempted rare-earth minerals from their original inclusion in the tariffs.
“There are no viable suppliers available in the U.S. currently to replace that of our Chinese manufacturers,” said Curtis Glover, president of operations at Lighting Technologies International Inc., a California-based producer of cinematic lamps that relies on Chinese rare earth for its xenon lights.
Rare-earth elements are also crucial in a range of military applications, as raw material for missile-guidance systems, satellites and aircraft electronics.
Mitsubishi Chemical America Inc. got an exemption for an obscure class of complex fluorine salts and carbonate esters, which go into the electrolyte for lithium-ion batteries used in electric vehicles including Tesla Inc.’s Model 3 and Chevrolet’s Bolt.
“There simply is no other viable source of these key inputs outside China in the volumes and the quality levels that we require,” Dennis Trice, the company’s president, told a USTR hearing. “Developing new sources outside of China to replace existing production would take massive long-term investments and many years.”
Mr. Trice said his company would have had to reconsider its investments in the U.S., which include a $38 million plant in Tennessee employing 2,600 workers, had it not received the exemptions. Official data show China accounted for 46% of such U.S. imports in the January-July period. Thailand provided 25%, trailed by Mexico, Japan and Germany. Tesla didn’t respond to a request for comment.
A similar vulnerability won Halliburton a reprieve for barite, a mineral used to weight drilling fluids, which aids oil-and-gas exploration. China provided 54% of U.S. imports from January-July. Data show India and Mexico are minor suppliers, with 18% and 17% of the market, respectively.
“China will not suffer consequences as a result of the proposed duties on barite, because China has the largest amount of barite reserves in the world, the majority of which is exported,” said Ryan Ezell, Halliburton’s global-operations manager.
For now, there is no sign that China plans to choke such supplies, but the exemptions add to a menu of last resorts. Analysts say Beijing could first unleash nontariff reprisals, such as squeezing the amount of services it purchases from the U.S.
The fear is whether constricting supply crosses the line into a “hot” war, said Terry Chan, an S&P Global Ratings analyst. But, “together with dumping U.S. Treasurys, it’s a so-called nuclear option.”
Write to Chuin-Wei Yap at chuin-wei.yap@wsj.com |
