The trade war between the United States and China has been the biggest political, diplomatic and economic issue for months now and the whole affair has escalated over the past weeks.
U.S.-China Trade War
After the U.S. raised tariffs on $200 billion worth of Chinese goods, Beijing retaliated in kind. But a new crisis might be brewing. In a new development, an official in China stated that products which use rare earth materials from the country should not be used to stunt its development.
Experts believe it is a threat that implies that Beijing could go after the U. S. and its multibillion-dollar tech industry as a retaliatory measure. China is one of the biggest producers of rare earth materials and dominates that industry completely.
Hiking Rate For Rare Earth Materials?
On the other hand, those materials are used extensively by tech companies in the U. S. in order to make products like mobile phones and computers. There has been some speculation about the possibility of China hiking rate of rare earth materials or stopping exporting it to the U. S. as a retaliatory measure after President Xi Jinping visited three mines last week.
The official in question was from the National Development and Reform Commission. He said, “What can I tell you is that if anyone were to use products that are made with the rare earth that we export to curb the development of China, then the people of [south Jiangxi province where rare earth are mined], as well as all the rest of the Chinese people, would be unhappy.”
The editor of the Chinese newspaper Global Times had also tweeted that China is, in fact, considering such measures. However, experts believe that such a move would be a massive escalation and cause a dent in one of the world’s biggest industries.
A global market strategist went on to state that most people have no idea about what China intends to do as a form of retaliation and are hence, latching on to random comments.