Trump: “If they don't give us magnets, and then we have to charge them 200 percent tariff or something”

The Chinese lockdown on rare-earth minerals has drawn the ire of President Trump, who is threatening crushing tariffs if the Middle Kingdom doesn't cough up more rare earths.

"They have to give us magnets," Trump told reporters. "If they don't give us magnets, and then we have to charge them 200 percent tariff or something, you know, but we're not gonna have a problem.

"We have tremendous power over them, and they have some power over us. With magnets, we're going to have a lot of magnets in a pretty short period of time. But with that being said, I think we have a great relationship."

In April, peeved by US tariffs, China banned the export of samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, which might sound like a Tom Lehrer song but is less funny. These are key components in the ability to manufacture processors, medical equipment, military kit, smartphone hardware, and vehicle engines – and China owns at least two-thirds of the mineral market.

It also banned the export of rare-earth mineral processing hardware, which given its expertise in the area dealt a big blow to competitors. And at least one arm of the US government is paying attention – the Pentagon recently became the majority shareholder in America's only rare earth mine.

The problem is that rare-earth mines are just that – rare. While the minerals they contain are refinable in small doses, there are very few areas of the planet that contain them in economically viable locations. China owns most of these, and getting new manufacturing facilities online takes years.

Over the last few years, the US and EU have been cooperating on such matters, but it takes time to build up production capacity, and in the meantime, supplies are running out.

Canada, Australia, and Malaysia are all exploring rare-earth mineral mining, as is Trump takeover target Greenland. But China has played the long game on this and for years advanced electronics manufacturers will be under its thumb, for the moment.

Dr Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, in an interview pointed out that Ford and Suzuki have already had to pause production of cars due to rare-earth shortages, and we're only months into the ban.

"Nearly every sector of the economy is vulnerable to rare earth shortages, given their role in such a broad range of manufactured goods," she warned.

Trump ended his comments by noting he is planning a trip to China to discuss the situation with its government "probably during this year or shortly thereafter." We'll see what deals there are to be made.

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