China has suspended exports of %CriticalMinerals and magnets to the U.S. that are used to manufacturer items ranging from semiconductors to solar panels.
The move by the Chinese government comes amid an escalating trade war between the world’s two biggest economies.
The magnets that have been suspended by China are essential for assembling electric vehicles, drones, robots, and even missiles.
The halt in shipments is a blow to U.S. companies and military contractors that depend on the minerals and magnets.
China’s government in Beijing says the halt in exports it part of its ongoing retaliation for U.S. President Donald Trump’s sharp increase in tariffs that began on April 2 of this year.
Specifically, China is halting the export of six heavy rare earth metals, as well as rare earth magnets, 90% of which are produced in the nation of 1.4 billion people.
The metals and magnets can now be shipped out of China only with special export licenses, said the country’s government.
The situation is expected to hurt U.S. manufacturing, notably automakers in Detroit, Michigan and technology companies in Silicon Valley.
The rare earth metals covered by the export suspension are used in magnets that are essential for many kinds of electric motors.
The metals also go into the manufacturing of jet engines, lasers, car headlights, and some spark plugs.
In a potential complication, China’s Ministry of Commerce, which issued the new export restrictions, has barred Chinese companies from dealing with several U.S. companies.
America is now forced to try and source the critical minerals and magnets its needs from other countries such as Canada and Australia.
However, many of the minerals and metals are unique to China, say analysts.
