With President Donald Trump’s 10% tariff on Chinese imports now in effect, Beijing is striking back, restricting the export of five key metals to the United States.
The metals, which are used in a wide range of products and materials like cellphones, chips, semiconductors, high end manufacturing, and aerospace, include tungsten, indium, bismuth, tellurium, and molybdenum.
“These are very unique high process materials that are very difficult to produce,” said Cameron Johnson, senior partner at Tidal Wave Solutions.
According to Johnson, these crucial metals are not only difficult to produce, but also limited in the United States to begin with.
“The U.S. doesn't have large scale production or inventory of these particular metals,” said Johnson. “So, one of the things that has happened over the years is China has built up a capacity to produce and refine rare earths that other countries cannot for a variety of reasons, primarily due to its ecosystem and government support.”
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While companies can try and import these metals either by getting additional licenses, which may increase import costs, or sourcing from a supplier in another country, Johnson says it'll be near impossible to take China out of the picture.
“Regardless of whatever location in the world, the Chinese are the best at mining, refining and processing it,” said Johnson. “So you're going to have to have some form of their technology or know-how in the supply chain to actually make it work.”
However companies choose to secure obtain these metals, consumers will still see higher prices on their end.
Fortunately, Johnson said this move is seen as more of a negotiating tool than a decision set in stone.
“At the moment we see these kind of restrictions as more pageantry than reality.”
