Trade war escalates

The US and China have been embroiled in a tariff and trade war throughout this year.

- WILSON SY

They previously agreed to a temporary truce which postponed the imposition of exorbitant tariffs until November. Lately, however, both countries have engaged in a tit-for-tat that targets various industries. Investors are justifiably concerned as the latest actions of the US and China have led to rising tensions that could derail the progress of trade negotiations. As a result, US and Chinese stocks remained volatile and pulled back from recent highs.

Tussle over rare earths

In response to restrictions on US technology exports, China imposed fresh export controls on rare earths and other critical minerals. China’s updated export controls now cover 12 rare earth metals from seven in April. China dominates the international supply chain as it accounts for at least 60 percent of mined minerals and 90 percent of processed rare earths globally.

Rare earth minerals are essential components for defense systems such as jets, missiles and submarines. They are also utilized for the manufacturing of advanced technologies which include smartphones, semiconductors and electric vehicles. China deems its latest action as a legitimate measure under international law to safeguard national security. In the same vein, the US views rare earths as critical resources due to limited access as well as their defense and technological applications.

Trump threatens with 100% additional tariffs