In a significant escalation of trade tensions, China has added two US rare earth miners, MP Materials and USA Rare Earth, to its export control list. This action is part of a broader retaliatory measure against the US Department of Defence, which recently blacklisted various Chinese companies due to their alleged connections to the People's Liberation Army. Alongside the miners, eight technology firms, including drone manufacturers Red Cat and Teal Drones, were also affected by the restrictions announced by China’s Ministry of Commerce on Monday.
The Chinese government justified the new measures as essential for "safeguarding national security," accusing the US of engaging in "malicious actions." In a parallel action earlier this month, the Pentagon prohibited several Chinese firms, including the electric vehicle manufacturer BYD, from participating in US military procurement contracts. This tit-for-tat strategy highlights the ongoing friction between the two nations despite recent efforts to establish a "constructive relationship of strategic stability" during a summit in Beijing last month.
The two blacklisted miners play a critical role in the US's strategy to break free from China's dominance over rare earth minerals, which are fundamental to various modern technologies, including military applications. Both companies have previously benefitted from US government funding aimed at bolstering domestic rare earth production. Meanwhile, China's restrictions extend to 46 US defense and aerospace companies, such as General Dynamics, Lockheed Martin, and RTX's Raytheon, limiting their ability to secure government contracts. However, Chinese subsidiaries of the affected US companies retain the ability to bid for these contracts.
SOURCES: Brian Rhoads, Raymond Ma | Facebook Florida Hillbilly
