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China Now Halting Shipments of Rare Earth Minerals To US
blackraven14250 writes with news that China, after putting at least a temporary stop to rare earth exports to Japan, is now doing the same with exports to the US; according to the linked article, this is in response to recent US promises to investigate certain Chinese trade practices.
When they are a sole supplier, it is terrorism.
Sigh....
terrorism-noun
1. the use of violence and threats to intimidate or coerce, esp. for political purposes.
2. the state of fear and submission produced by terrorism or terrorization.
3. a terroristic method of governing or of resisting a government.
By your reasoning, if Apple decided they didn't want to sell me an iPhone, Apple would be engaging in terrorism.
I don't care if it's 90,000 hectares. That lake was not my doing.
Do you subsidize your local business, or do you dump? What is happening in China is that they are doing BOTH. Keep in mind that China belongs to IMF and WTO. They have promised to do allow their money to float, to not subsidize general trade (though apparently key tech can be), and to not dump on the open market. China breaks all of those rules. Does Sweden? Nope.
US is a member of IMF and WTO. Yet, just look at the agriculture sector.
1. Huge tariffs on cane sugar
2. Huge subsidies on corn
3. Dumping agriculture surplus to 3rd world, killing their local production
4. Subsidies on wheat, cotton and tons of other stuff
Of course, this is not specific just to US. Most European countries do that too w.r.t. agricultural subsidies (see, France, Holland, Germany, UK, etc..). Hell, basically HALF of all the money from the EU (the European budget), is spent on agriculture subsidies!
So yes, US, please stop accusing China of stuff while you do the same thing. Currency manipulator next? Sure, China does it! So does the US and everyone else!!
The *real* problem for the US is China is not their puppet.
My only hope is that US and China don't fuck up the trade situation more than it already is. You know, step back from big red trade-war button and be the bigger man. But then for some reason I do not expect China or US to do that - both have way too much nationalistic pride, for their own economic demise.
Exactly. Limiting free trade does absolutely nothing to help a country but harms both countries.
China has had phenomenal success by limiting free trade.
"Thanks for perfectly illustrating why we are in this situation. "This is America!" is a meaningless phrase."
Acutally according to the article he might be on to something: "U.S. rare earth companies have begun looking to reopen old mines and search for new deposits, but industry experts say that relaunching an independent U.S. supply chain could take 15 years."
I know it says 15 years, but I have a feeling that if China really decided to withhold rare earth minerals for an extended time we'd find a supply a bit faster.
The only reason we use China's rare earth minerals is because they mine it and ship it to the US cheaper than we can mine it ourselves: "many U.S. companies have not jumped into the market because China's state-owned mines keep rare earth prices artificially low."
But we have plenty to mine: "the U.S. holds rare earth ore reserves of up to 13 million metric tons. By contrast, the entire world produced just 124,000 metric tons in 2009". That means we have roughly 104 years worth of rare earth ore reserves, I think we'll be just fine.
China's kind of like the neighbor kid that knocks on my door and offers to mow the lawn for $20. It's not that I can't mow myself, but when it's so cheap to pay someone else why do it myself? If he ever didn't show up for a couple weeks I'd just do it myself, but as long as he's offering I'll keep paying him.
my karma will be here long after I'm gone
Exactly, and as a Brazilian I can emphasize that the US subsidies on sugar cane and corn have been affecting us for decades. Brazil has been complaining to the WTO since a long time ago and recently we started getting some victories there. It is the same thing with a lot of countries in Europe. I know there is no saint in this fight, but it seems very hypocritical to me to see Americans complaining about China practices when they have been doing the same thing to others for years and years.
China doesn't have to buy US debt.
Actually they do have to buy US debt. China manages their currency and the only way to maintain their currency at a weak exchange rate to the dollar is to buy US Treasuries. China cannot stop buying dollars in the short term even if they want to.
Especially if commodities start trading in something other than US dollars.
Won't happen any time soon. The dollar is the world's de-facto reserve currency. Many commodities (including oil) trade in US dollars. This is not likely to change.
After all, why the hell would you support the dollar today? The interest rate sucks,
Which interest rate, out of curiosity, are you referring to? Currencies don't have interest rates. Treasury bills do, but yields on government debt are low everywhere except on governments in risk of default (like Greece). Furthermore, the coupon on US treasuries is almost always lower than for most other debt because it is considered safer than any other debt. US treasuries are backed by the ability of the US government (which has never defaulted) to raise taxes on the biggest single economy in the world. Nothing is perfectly safe but that's about as good as it gets.
the US government is spending more than ever before, and the US economy (which has been in the tank for a while now) continues to struggle.
It's a global recession. Every major economy is struggling, not just the US.
Plus add this to the fact that US banks have no idea who they have loaned money to -
I have no idea where you got this idea or what you are referring to. I'm pretty sure the US banks have a very good idea who they have loaned to. They have other problems but knowing who their debtors are is not one of them.
no, there are far wiser places to put your money today than US treasury notes. In fact, almost anywhere BUT US T-bills will get you a better return.
No one invests in T-bills to get a big return. The return on Tbills has been very low for most of the last century when compared with alternatives. Hell, the calculations for cost of investments is usually found starting with the so called risk-free rate (normally US Treasuries which are considered the world around to be the closest thing to a risk free investment) plus some additional interest to compensate for additional risk. The reason people buy them is because they are safe or because (like China) they are trying to manage their exchange rates. If you are looking for a big return, government debt is rarely the best option out there.