China announced the latest edition to the global trade war as they will require export licensing for foreign companies shipping products containing at least 0.1% rare earth metals or that are made with Chinese rare earth technology. Making up about 90% of the supply, China is home to the largest concentration of rare earth metals. These seventeen different soft metals are utilized for the production of technology, automobiles, and many defense products. Trump recently announced an 100% tariff on China and restrictions on U.S. software exports. Experts are noted as viewing this as an escalation on China's part as they face severe economic pressure.
These policies show how neither economic system in China and the U.S. are strictly pure. Both are forms of government intervention in the economy. The U.S. is not a pure capitalistic society but imposes less nationalization of industries as China. China's requirement of licensing on foreign companies utilizing rare earth metals from China showcases a more strict form of government control over production.
https://finance.yahoo.com/news/hit-back-united-states-trade-000105881.html
2 comments:
Both countries seem to be using trade as a form of leverage rather than cooperation. It will be interesting to see how long this back and forth continues before the economic consequences start to outweigh the political gains.
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