Now there is only one country which had no compromise with US in tariff. It is China the largest economy just after US on earth. Their battlefield in on rare earth. China wants semiconductor from US and US wants rare earth from China.
China is the world’s largest processor of rare earth elements for a variety of industries, including electric vehicles (EVs), wind turbines, magnets, consumer electronics and other clean energy technologies. Especially in national defense industry, it is the throat. Even the mineral reserve in China is just 60%, but the processing is 95% of the world. For in other countries they are bounded by pollution law for it would made underground water in great pollution for a long time.
Brazil, India, Malaysia, Australia, Ukraine and Myanmar all have reserve in rare earth. Now an Australian company just agreed to have processing in Malaysia. Ukraine agreed to share all the minerals including rare earth with US, but will be done after the war and not at once. US wants to have processing in Myanmar, but China is in support with the Myanmar military government and US in support with Burma, the anti-government force. If US gives weapons to the military government, they will be blame by the whole world. If US fully supports the anti-government force, it will become a Proxy War. That is to fight with China indirectly through the government force and anti-government force.
US is trying to find alternatives of rare earth including production and processing, but it will take years. Now they still rely on China to a great extent. China is also in trouble with sanction of semiconductors, but they still can get from transferring through the 3rd, 4th and 5th …… countries. However, US Senate is proposing a law that all chips should be install with a GPS system and if they are shipped to sanction places will be turn off function at once. Basically, the technical problems are solved. So we have to watch the Final Curtain and see how it shows!!!
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.