TRADE WAR: CHINA'S WEAPONISATION OF RARE EARTHS

After Beijing announced new restrictions on exporting rare earth minerals and the specialised magnets they make, the world's auto industry warned of shortages that could force factory closures. China's recent skilful deployment of rare earth sanctions was probably the key factor in forcing Washington to reverse its tariff rises on the country. They represent a new era of Chinese economic statecraft — evidence of a sanctions policy capable of pressuring not only small neighbours but also the world's largest economy.

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Everyone knew that China dominates rare earth minerals production. Nevertheless, over the decade and a half since China first cut rare earth exports to Japan in 2011, rest of the world has failed to find new suppliers. Some modest steps were taken. Korea expanded its stockpiles. Japan invested in Australian mines. Yet most governments devised critical minerals strategies and then chose not to fund them. Manufacturers speak of resilience yet some keep only a week's supply of rare earth magnets in their inventories. This is a weapon they have been staring at for decades. They should not have been surprised when Beijing finally pulled the trigger.