The US government has again excluded rare earths and critical minerals from its next tranche of proposed tariffs on Chinese imports, reflecting its dependence on China for supplies of the technologically sensitive materials.
The US Trade Representative (USTR) late yesterday released a list of all products that would be included under the next round of tariffs — covering almost the entirety of remaining imports from China. The US is proposing to implement tariffs of up to 25pc on over 3,800 products worth an estimated $300bn/yr. Tariffs are already in place on $250bn/yr of imports from China.
The proposed list covers essentially all products that are not already subject to tariffs, excluding only "pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials, and critical minerals," USTR said. Products that have been excluded from previous rounds of tariffs will also not be affected.
The USTR did not define "critical minerals", but rare metals and products including antimony (metal and trioxide), tungsten (APT, oxide and carbide) and indium (unwrought metal) are not included in the product list. China is a major supplier of these metals.
The US government last year removed rare earth elements from its third tranche of import tariffs on Chinese goods, which took effect in September.
The exclusion of rare earths reflects China's dominant role in the global market. China accounts for more than 90pc of global supplies of rare earths, while 70-80pc of all US imports of rare earth oxides and metals come from China.
The Chinese government announced yesterday it will impose 5-25pc tariffs on imports of hundreds of metals, ores and ferro-alloys from the US on 1 June, in response to US President Donald Trump's move last week to raise existing tariffs on $200bn/yr of Chinese imports to 25pc.
China's latest move will add 25pc tariffs on imports of rare earth ores and concentrates, oxides of several elements, such as yttrium, praseodymium, terbium and mixed rare earth carbonates from the US. Beijing will maintain its 5pc tariff on US imports of rare earth metals such as dysprosium, lanthanum, cerium and yttrium, while rare earth oxides of cerium and lanthanum will be subject to a 20pc tariff.
Most Chinese rare earth companies are expected to be little affected because their imports from the US are relatively low. The biggest impact will be on companies that have invested in rare earth mines in the US.
The USTR plans to hold a public hearing on the next set of tariffs on 17 June after inviting comments from affected companies. The entire administrative process could take 2-3 months to complete.
