US gives rare earths reprieve in revised US$200 bln China tariff list

BEIJING: The United States did not include rare earth elements, metals used in magnets, radars and consumer electronics, from its final list of tariffs on US$200 billion of Chinese goods, underscoring its reliance on China for the strategic minerals.

China is the world’s largest producer of rare earths and the biggest supplier to the United States, according the US Geological Survey.

Rare earth elements and minor metals have broad applications in US industry, ranging from jet engines to mobile phones to oil and gas drilling.

Most of the minerals the US had originally targeted for tariffs were on a list of 35 minerals published by the US Department of the Interior in May that were deemed critical to the country’s security and economic prosperity.

Rare earth metals and their compounds, as well as mixtures of rare earth oxides or chlorides, were all included on a provisional list of tariffs on Chinese goods unveiled by the Office of the US Trade Representative (USTR) in July.

However, the final list released on Monday does not mention rare earths, a group of 15 lanthanide metallic elements plus the metals scandium and yttrium.

The latest tariffs will go into effect on Sept 24 at a rate of 10 per cent.

Permanent metal magnets and articles intended to become permanent magnets, which could include rare earth oxides neodymium and praseodymium, also dropped off the list.

That category accounted for US$191.2 million of imports in 2017, according to the USTR.

The United States is aware of the strategic importance of rare earth metals as illustrated by a US law passed last month that bans the purchase of rare earth magnets from China for the military in the 2019 fiscal year, said Dylan Kelly, a resources analyst at brokerage CLSA in Sydney.

The law “clearly highlighted how exposed the nation was to any kind of disruption to the Chinese supply chain,” said Kelly. — Reuters