US targets China as rare earth magnets for possible tariffs

The Biden administration is considering an investigation into whether imports of rare earth magnets made largely in China pose a national security threat that could warrant tariffs.

The White House said the Commerce Department would consider whether to examine neodymium magnets, which are used to manufacture everything from smartphones to Electric car engines.

President Joe Biden is considering the move as part of measures unveiled by the White House on Tuesday Enhancing the resilience of US supply chains In areas including rare earths, food and pharmaceuticals amid concerns about over-reliance on China.

The administration will decide whether to investigate the national security implications of imports of neodymium magnets under Section 232 of the 1962 Trade Act, which was rarely used until former President Donald Trump used it in Justification of tariffs on steel and aluminum imports from US allies.

“In the case of neodymium magnets, these tariffs will be directed directly to China, which dominates its manufacture,” said Martin Rasser, a technology expert at the Center for a New American Security in Washington. “If the tariffs are high enough, this may provide financial incentives to build a domestic US industry.”

Washington is becoming increasingly concerned China’s dominance in rare earths, 17 metallic elements used in the manufacture of commercial goods such as computer hard drives and military products such as radar, sonar, and precision-guided missiles.

The Financial Times reported in February that China was so Consider limiting export It is a rare earth used in the production of the F-35 fighter jet.

“We are highly dependent on imports, especially from China, for rare earth neodymium magnets. Section 232 is another tool we can use to help . . . a senior US official said.”

“We are not looking to engage in trade wars with our allies and partners,” the official added.

When Biden ordered a supply chain review, he prioritized Semiconductorsrare earths, pharmaceuticals and electric car batteries.

Officials said the administration would use the Defense Production Act — a 1950 Korean War-era law that allows the United States to force industry to prioritize government contracts to support national security — to re-produce 50-100 important drugs from abroad.

The Department of Energy plans to launch a 10-year plan to develop a domestic supply chain for lithium batteries, which are critical to electric vehicles, and will immediately use $17 billion in lending facilities to support the effort. The Department of Agriculture will separately commit $4 billion to help strengthen and diversify food supply chains in the United States.

Biden will also try to host a forum with allies to enhance supply chain cooperation. him too He is expected to discuss this issue At a summit between the European Union and the United States next week in Brussels following the G7 meeting in Cornwall.

The official said the administration would also create a “trade offensive force” led by Catherine Tay, the US trade representative, that would propose enforcement actions against countries that engage in unfair trade practices that undermine the resilience of US supply chains.

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