I don't know if we are ready to call it a real trade "war" yet, but the building of walls to trade and exchange continues, with China throwing a few more bricks up. We've touched on the rare earths controversy before. Ambrose Evans-Pritchard gives us an update:Hot political summer as China throttles rare metal supply and claims South China Sea
by Ambrose Evans-Pritchard, The Telegraph
The United States and Europe have been remarkably insouciant about supplies of rare earth minerals so crucial to frontier technologies, from hybrid engines to mobile phones, superconductors, radar and smart bombs.
Lack of strategic planning by the West has allowed China to acquire a world monopoly on this family of seventeen metals. Assumptions that Beijing would never risk its reputation as a global team player by abruptly strangling supply have proved naive.
China’s commerce ministry has cut export quotas for these metals by 72pc for the second half of this year. It is perhaps the starkest move to date in the Great Power clash over scarce resourses...
Evans-Pritchard calls this naive. I personally call it an all-too-predictable result of having leaders in the West who have enjoyed a long run of positive social mood and who, unlike the battered old elites of Communist China, have never endured deep privation and have come to believe their own hype about not needing inventory of critical supplies. When all you've known is good times, it is easy to emulate the grasshopper. I fear the coming trade wars are going to come as quite a shock to the governing elites and the bureaucratic wars that are going to erupt when corporate persons attempt to reopen dormant mines in an era of negative mood is going to only deepen that shock.
This particular trade spat has deep relevance to me. Not only are critical electronic devices made with these rare earths, but many high-purity radioisotopes used in cancer treatments or diagnostics are rare earth lanthanides such as lutetium and samarium.
Keep an eye out as these tit-for-tat trade spats increase in intensity.