• By The Financial District


China is furious that the United States is revving up its production of rare earth elements (REE) that are required for the manufacture of batteries for cellular phones, communications equipment, electric cars and weapons.

Writing for the Asia Times Weekly, Chris Gill said China has responded angrily to a US executive order to reduce the country's dependence on rare earths from China.

Reuters reported the order could lead to tariffs, quotas or other possible import restrictions, which could irritate China. Tencent news, for instance, said the US order means the country had “entered a state of national emergency” and could signal an end to Chinese domination of the REE market. In fact, China's exports of vital rare earths have dropped 62% while Indonesia and Malaysia are looking into tin mine tailings to retrieve REEs and Canada is set to exploits its own large REE deposits.

China is holding back exports of REE even as the US, EU, Australia and others are re-opening old mines and exploring for new deposits. Rare earths are actually plentiful but difficult to get to – China’s are cheaper because they are more accessible. The Peoples’ Daily reported that the US is afraid of being "stuck" with China for REE supplies and noted that last year, the US imported 80% of its REE needs from Chia. Washington is fully fired up to support its domestic REE industry, the paper reported.