China drops heavy hint it is about to pull the trigger on its most powerful weapon in the trade war

trump xi

  • The US heavily relies on China for rare-earth materials, which are 17 elements widely used in products like batteries, smartphones, electric cars, and fighter jets.
  • Beijing appears ready to weaponize those exports in its trade war with Washington.
  • China’s top economic planning commission and state media suggested this week that the country might restrict rare-earth exports to the US.
  • Restricting Chinese rare earths to the US could cripple the American tech, defense, and manufacturing industries.
  • Visit Business Insider’s homepage for more stories.

China has dropped its most obvious hint yet that it might restrict exports of rare earths to the US as a strategy in the trade war, a move that could cripple the American tech, defense, and manufacturing industries.

Rare-earth materials — which consist of 17 elements on the periodic table — are one of the most important Chinese exports to the US, as they are found in products such as batteries, smartphones, electric cars, and fighter jets. The minerals are used in tiny amounts but can be crucial to the manufacturing process.

China is the world’s largest supplier of rare-earth materials — accounting for 90% of global production — and the US relies on China for 80% of its rare-earth imports, according to Bloomberg.

There had been speculation that Beijing would weaponize rare earths in its trade war with Washington since last week, when Chinese President Xi Jinping and his top economic adviser, Vice Premier Liu He, made a highly publicized visit to a rare-earth factory in eastern China.

Read more: Xi Jinping may have shown how he plans to cripple US tech and defense giants in the trade war with a visit to a Chinese magnet factory

xi jinping rare earth factory visit

Beijing officials further fueled the flames this week by mentioning rare earths again in a series of state media articles and comments on social media.

The National Development and Reform Commission, which oversees the country’s economic policy, said in a Q&A published in the state-run People’s Daily on Wednesday: “Do you suggest that rare earths will become a part of China’s countermeasures against the US’s unwarranted pressure?”

“What I can tell you is that if someone wants to use our rare earths to manufacture products and use them to curb China’s development, then the people of the revolutionary soviet base and all the Chinese people will not be happy,” it continued.

“There are no winners in the trade war,” the NDRC added.

Read more: US companies pay ‘almost entirely’ for tariffs on Chinese products, new IMF study shows — blowing a massive hole in Trump’s favorite justification for the trade war

Trump Xi dinner

Hu Xijin, the editor-in-chief of the nationalistic, state-owned Global Times tabloid, also tweeted on Tuesday night: “Based on what I know, China is seriously considering restricting rare earth exports to the US. China may also take other countermeasures in the future.”

The Global Times suggested last week that Xi’s visit to the rare-earth factory “has been widely viewed as a form of leverage for China in the trade war with the US.”

Stocks in Chinese rare-earth companies have skyrocketed ever since Xi’s visit.

rare earth

The US and China have levied billions of dollars’ worth of tariffs on each other’s goods since March 2018.

Washington raised tariffs to 25% from 10% on $200 billion worth of Chinese goods on May 10, and Beijing said three days later that it would raise tariffs on $60 billion worth of American goods starting June 1. Hours after that, the US drew up a list of prospective tariffs on another $300 billion worth of goods.

The US did not include rare-earth materials in either list of tariff targets, illustrating its reliance on China for them.

Global stocks fell Wednesday as traders braced for further escalation in the trade war. But Ryan Castilloux, the managing director of the rare-earths consultancy Adamas Intelligence, tweeted on Wednesday that there was “still a low probability” that China would withhold rare earths to the US, “as it would quickly (and painfully) escalate tit-for-tat.”

SEE ALSO: China’s biggest chipmaker has applied for ‘voluntary delisting’ from the New York Stock Exchange amid the trade war and Trump’s crackdown on Chinese tech

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China has dropped its most obvious hint yet that it might restrict exports of rare earths to the US as a strategy in the trade war, a move that could cripple the American tech, defense, and manufacturing industries.

Rare-earth materials — which consist of 17 elements on the periodic table — are one of the most important Chinese exports to the US, as they are found in products such as batteries, smartphones, electric cars, and fighter jets. The minerals are used in tiny amounts but can be crucial to the manufacturing process.

China is the world’s largest supplier of rare-earth materials — accounting for 90% of global production — and the US relies on China for 80% of its rare-earth imports, according to Bloomberg.

There had been speculation that Beijing would weaponize rare earths in its trade war with Washington since last week, when Chinese President Xi Jinping and his top economic adviser, Vice Premier Liu He, made a highly publicized visit to a rare-earth factory in eastern China.

Read more: Xi Jinping may have shown how he plans to cripple US tech and defense giants in the trade war with a visit to a Chinese magnet factory

Xi and his top economic adviser, Liu He, second from right, visited the JL MAG Rare-Earth factory in Ganzhou, in eastern China, on May 20, prompting speculation that China could weaponize its rare-earth materials in the trade war.
Xinhua/Xie Huanchi via Getty

Beijing officials further fueled the flames this week by mentioning rare earths again in a series of state media articles and comments on social media.

The National Development and Reform Commission, which oversees the country’s economic policy, said in a Q&A published in the state-run People’s Daily on Wednesday: “Do you suggest that rare earths will become a part of China’s countermeasures against the US’s unwarranted pressure?”

“What I can tell you is that if someone wants to use our rare earths to manufacture products and use them to curb China’s development, then the people of the revolutionary soviet base and all the Chinese people will not be happy,” it continued.

“There are no winners in the trade war,” the NDRC added.

Read more: US companies pay ‘almost entirely’ for tariffs on Chinese products, new IMF study shows — blowing a massive hole in Trump’s favorite justification for the trade war

High-level Chinese and US negotiators, led by Xi and Trump, at a working dinner in Buenos Aires, Argentina, in December.
Reuters/Kevin Lamarque

Hu Xijin, the editor-in-chief of the nationalistic, state-owned Global Times tabloid, also tweeted on Tuesday night: “Based on what I know, China is seriously considering restricting rare earth exports to the US. China may also take other countermeasures in the future.”

The Global Times suggested last week that Xi’s visit to the rare-earth factory “has been widely viewed as a form of leverage for China in the trade war with the US.”

Stocks in Chinese rare-earth companies have skyrocketed ever since Xi’s visit.

Rare earths, clockwise from top center: praseodymium, cerium, lanthanum, neodymium, samarium, and gadolinium.
U.S. Department of Agriculture / Peggy Greb

The US and China have levied billions of dollars’ worth of tariffs on each other’s goods since March 2018.

Washington raised tariffs to 25% from 10% on $200 billion worth of Chinese goods on May 10, and Beijing said three days later that it would raise tariffs on $60 billion worth of American goods starting June 1. Hours after that, the US drew up a list of prospective tariffs on another $300 billion worth of goods.

The US did not include rare-earth materials in either list of tariff targets, illustrating its reliance on China for them.

Global stocks fell Wednesday as traders braced for further escalation in the trade war. But Ryan Castilloux, the managing director of the rare-earths consultancy Adamas Intelligence, tweeted on Wednesday that there was “still a low probability” that China would withhold rare earths to the US, “as it would quickly (and painfully) escalate tit-for-tat.”

Sammy Singh

Graduate of UCLA and Wharton School of Business and Media Personality. World renowned global entrepreneur, venture capitalist, financial technology professional, tax specialist, marketing mogul, and more! Connect with me at: www.linkedin.com/in/cfo www.instagram.com/champagnegqpapi www.facebook.com/sammysinghcxo www.twitter.com/cxosynergy

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You'll soon be able to use your iPhone to get on the New York City subway — here's how to set it up (AAPL)

Wed May 29 , 2019
<div><p><img src="https://static2.businessinsider.com/image/5ced9bd711e2050ca37895e2-960/apple%20pay%20express%20transit.jpg" border="0" alt="Apple Pay Express Transit" data-mce-source="Apple"></p><p></p> <ul class="summary-list"><li>New York's Metropolitan Transit Authority is launching a new pilot program that will make it possible to use your <a href="https://www.businessinsider.com/category/iphone">iPhone</a> or <a href="https://www.businessinsider.com/category/apple-watch">Apple Watch</a> to pay for subway fare.</li> <li>As part of the program, new contactless readers have been placed at select stops along New York's 4,5,6 line and Staten Island buses.</li> <li>The launch comes after Apple said in March that it would bring contactless public transit payments to cities such as New York, Portland, and Chicago.</li> <li><a href="https://www.businessinsider.com/">Visit Business Insider's homepage for more stories. </a></li> </ul><p>New York City's subway system is getting a big upgrade that will allow passengers to pay for subway fare with a simple tap rather than a swipe.</p> <p>On May 31, patrons taking the 4, 5, and 6 trains — a popular subway line that stops at busy stations like Grand Central Terminal, Wall Street, and Barclays Center — will be able to enter the subway by holding their smartphone or wearable device near a reader rather than swiping a Metro Card.</p> <p>It's the beginning of a pilot program for the Metropolitan Transit Authority's <a href="https://www.businessinsider.com/nyc-subway-metrocard-replacement-omny-has-one-big-problem-2019-5">new OMNY contactless fare system</a>, which will accept digital wallets such as Apple Pay, Google Pay and Samsung Pay as well as contactless credit cards from major companies such as Visa, MasterCard, American Express, and Discover.</p> <p>For Apple device users, that means you'll be able to board the subway by holding your iPhone or Apple Watch near the reader, similar to the way you can digitally scan your boarding pass for a flight through Apple's Wallet app. The feature, which Apple is calling Apple Pay Express Transit, works very much like the standard version of Apple Pay.</p> <p>Just choose the card you'd like to use to pay for subway fare, and your Apple device will know to charge that card specifically when your phone or Apple Watch is held near one of the MTA's contactless readers. You don't have to wake your phone or watch in order for this to work, just holding it near the reader will do the trick.</p> <p>The launch comes after Apple announced in March that it will soon make its Apple Pay service compatible with public transit systems in New York, Chicago, and Portland. </p> <p>As part of this pilot program, the service will be available at 16 stops along the 4,5,6 line between Grand Central terminal in Manhattan and Atlantic Avenue-Barclays Center in Brooklyn. It will also be present on all Staten Island buses.</p> <p>The new fare system currently only supports single fare tickets, but will eventually support other options as well. After the public pilot ends, the MTA is aiming to roll out the new readers to the rest of the 4,5,6 line and additional buses in 2020. </p> <p>It's a notable step forward for New York's public transit system, which will join other major cities such as London and Sydney that already offer contactless payments for their respective transit systems.</p> <p>Here's a look at what Apple device users should do to get started. </p><p><strong>SEE ALSO: <a href="https://www.businessinsider.com/gmail-best-new-features-tips-tricks-2019-5">These 9 Gmail features will help you get the most out of Google's popular email service</a></strong></p> <h3>First, make sure your iPhone is running the latest software.</h3> <img src="https://static1.businessinsider.com/image/5ceda0c211e205110f1415d3-400-300/first-make-sure-your-iphone-is-running-the-latest-software.jpg" alt=""><p></p><p>To do this, open your iPhone's Settings menu, select General, and then tap Software Update. Your device must be running on iOS 12.3 or higher to use Apple Pay Express Transit.</p> <br><br><h3>Make sure your Apple Watch is up to date, too.</h3> <img src="https://static4.businessinsider.com/image/5ceda2ce11e2050d7f58684f-400-300/make-sure-your-apple-watch-is-up-to-date-too.jpg" alt=""><p></p><p>Open the Watch app on your iPhone, select the General option, and choose Software Update. Your Apple Watch must be running on watchOS 5.2.1. </p> <br><br><h3>Then, open your iPhone's Settings menu and choose Wallet & Apple Pay.</h3> <img src="https://static2.businessinsider.com/image/5ceda19811e205109048d4d3-400-300/then-open-your-iphones-settings-menu-and-choose-wallet-and-apple-pay.jpg" alt=""><p></p><p>If you've ever added a credit card to your iPhone, it's the same menu option. </p> <br><br><h3>Choose "Express Transit Card" and select the card you would like to use.</h3> <img src="https://static2.businessinsider.com/image/5ceda22b11e20510d66a5633-400-300/choose-express-transit-card-and-select-the-card-you-would-like-to-use.jpg" alt=""><p></p><p>The Express Transit Card feature is different from the regular Apple Wallet because it doesn't require your passcode or Face ID to work.</p> <br><br><h3>Then, authenticate with Face ID, Touch ID, or your passcode to confirm that this card will be used for Express Transit.</h3> <img src="https://static4.businessinsider.com/image/5ceda26e11e205042e5aef17-400-300/then-authenticate-with-face-id-touch-id-or-your-passcode-to-confirm-that-this-card-will-be-used-for-express-transit.jpg" alt=""><p></p><p>That's it! 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