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The Biden administration is studying an investigation into whether imports of rare earth magnets manufactured largely in China pose a threat to national security that could justify the imposition of tariffs.
The White House said the Commerce Department would examine whether to probe neodymium magnets, which are used to manufacture from smartphones to electric vehicle motors.
President Joe Biden is considering the measure as part of the measures presented Tuesday at the White House increase the resilience of American supply chains in areas such as rare earths, food and pharmaceuticals amid concerns about China’s over-reliance.
The administration will decide whether to investigate the national security implications of imports of neodymium magnets under section 232 of a 1962 trade law, which was rarely used until former President Donald Trump used it. per justify tariffs on steel and aluminum imports from US allies.
“In the case of neodymium magnets, these tariffs would go directly to China, which dominates their manufacturing,” said Martijn Rasser, a technology expert at the Center for New American Security in Washington. “If tariffs are high enough, this could provide financial incentives to build a U.S. domestic industry.”
Washington has become increasingly concerned about this China’s dominance in rare earths, 17 metal elements used to make commercial goods such as computer hard drives and military products such as radar, sonar and precision guided missiles.
The Financial Times reported in February that China did considering limiting exports of rare earths used to produce F-35 fighter jets.
“We depend heavily on imports, especially from China, of rare earth neodymium magnets. Section 232 is another tool we can help to help ourselves. . . reduce our dependence, ”a senior U.S. official said.
“We don’t want to wage trade wars with our allies and partners,” the official added.
When Biden ordered supply chain reviews, he put it first semiconductors, rare earths, pharmaceuticals and electric vehicle batteries.
Officials said the administration would use the Defense Production Act, a 1950s-era Korean law that allows the U.S. to force industry to prioritize government contracts to help national security, to return the production of 50 to 100 critical drugs from abroad.
The energy department plans to launch a ten-year plan to develop a domestic supply chain for lithium batteries, which are critical for electric vehicles, and will immediately use $ 17 billion in loans to support that effort. The Department of Agriculture will separately commit $ 4 billion to help strengthen and diversify U.S. food supply chains.
Biden will also try to organize a forum with allies to boost supply chain cooperation. So is it is expected to discuss the issue at an EU-US summit next week in Brussels following the G7 meeting in Cornwall.
The official said the administration would also create a “trade strike force” led by Katherine Tai, the U.S. trade representative, who would propose enforcement action against countries engaged in unfair trade practices that erode the resistance of the chains. American supply.
Carry on Demetri Sevastopulo on Twitter
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