Chart of the week: China’s trade war trump card

Rare earth metals are not as scarce as the name might suggest. However, China is by far the dominant supplier to the US, accounting for about 80% of American imports (and 71% of the entire global supply of mined rare earth minerals). The metals – a group of 17 elements such as neodymium and yttrium – are used in applications ranging from military and industrial lasers to energy-saving light fittings.

Speculation that China might restrict access to rare earths as a negotiating tool in its trade war with the US increased last week after President Xi Jinping visited a rare-earth facility in Jiangxi. As a result, the share prices of many rare-earth producers (including China Rare Earth Holdings, featured here) have enjoyed a spike higher.
“If you’re one of that breed of free marketeers who don’t believe Facebook should be broken up… try listening to Chris Hughes. The Facebook co-founder and friend of Mark Zuckerberg says governments… have stood by… as the Zuck… has built himself more personal power than anyone on the planet… He controls the algorithms that dictate what news billions of people consume, which media they watch and who they talk to. He has the power to follow their hobbies, interests and opinions, and… to monetise that knowledge… The decisions from monopoly watchdogs to allow him to buy Instagram and WhatsApp mean he controls the vast majority of platforms used by the 70% of Americans using social media. These deals have destroyed competition…  There was another man who would have agreed with Hughes. His name was Adam Smith.”
Jim Armitage, Evening Standard

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