China will implement an additional 5pc tariff on imports of US rare earth metals and oxides effective 1 September and maintain its 25pc tariff on imports of rare earth ores and concentrates.
The new China tariffs are a part of $75bn total worth of new tariffs on US goods Beijing announced on 23 August in retaliation to planned US tariffs on $300bn worth of Chinese goods that are to go into effect in September and December.
China's tariffs on rare earth metals such as dysprosium, lanthanum, cerium and yttrium will be raised to 10pc from 5pc, while tariffs on yttrium and praseodymium oxides will be increased to 30pc from 25pc. Beijing will also impose a 5pc tariff on lanthanum oxide, lanthanum chloride, cerium oxide, cerium hydroxide, and terbium and yttrium chlorides effective 1 September.
The new tariffs are expected to have limited impact on the markets for rare earth metals and oxides as Chinese imports of these commodities from the US are low. China imported only 81kg of rare earth metals and 1kg of oxides in July from the US.
China will maintain its 25pc tariff on imports of rare earth ores and concentrates and mixed carbonates from the US. Its tariffs on imports of US terbium and yttrium compounds will be lifted to 30pc from 25pc effective 1 September. China will also implement a 5pc tariff on imports of US praseodymium, neodymium and scandium compounds from 1 September.
The biggest impact will be on Chinese companies that have invested in rare earth mines in the US.
China imported 20,867t of rare earth ores and concentrates in January-July this year, up by 76pc from 11,825t a year earlier. China imported 27,567t from the US in the whole of 2018.
Domestic major producer Shenghe Resources produced 3,557t and sold 12,699t of rare earth concentrate in April-June this year, including sales of imported material from the Mountain Pass rare earths mine in California into the Chinese market. By comparison it produced 8,210t and sold 45,186t of rare earth compounds over the whole of 2018, including sales of imported material from Mountain Pass.
US president Donald Trump on 23 August ordered an increase in tariffs on imports from China, after Beijing announced retaliatory tariffs on $75bn of US goods. The existing 25pc tariff on $250bn/yr of imports from China will be raised to 30pc effective 1 October, while an additional $300bn/yr in imports from China, which was set to be taxed at 10pc, will be subject to a 15pc tariff.
The US government in May excluded rare earths from its next tranche of proposed tariffs on Chinese imports, reflecting its dependence on China for supplies of the technologically sensitive materials. 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.
