Musk's Space X dependent on China's Rare Earth Metals

As the US and China continue to escalate their trade wars with tarrifs on various goods ever increasing its important to note that there are somethings that the US cannot do without and is unable to get from anywhere else despite all the rhetoric from Trump, One these sectors is rare earth elelments of metals that are used in a wide range of modern technology. According to sources it appears that Elon Musk's Space X along with others is heavily dependent on China's export of Rare Earth Elements
It has been reported that shipments of seven rare earth metals (REM) for which export controls were tightened in early April effectively stopped on 4 April. According to the New York Times (NYT), exporters are now awaiting permits from the Chinese Ministry of Commerce. The NYT further reports that the wait for licences may be lengthy, with a delay of several weeks to several months being anticipated. Additionally, it is not guaranteed that all applicants will receive licences.
A number of Chinese rare earth suppliers have already declared force majeure on international contracts. Several ships are already fully loaded with rare earths, but cannot leave ports without permission from the Chinese Ministry of Commerce.

According to an unnamed Chinese rare earth trader quoted in the NYT, ships carrying rare earths will be sent to buyers no sooner than 60 days, although this is likely to be later.
The economic consequences of China's refusal to supply rare earth metals are broader - from the military sector, electronics, electric vehicles and the renewable energy sector (RES), where they are used in batteries and motors,
Rare earth metals are essential in the military for the production of radar systems, satellites and precision weapons. Stopping the export of such elements will hit the US military industry hard, analytss believe.
Donald Trump is currently intent on protecting the American economy, but the US could end up being even more vulnerable. Another industry that could suffer is space travel. In particular, the restrictions will affect one of Elon Musk's main assets, SpaceX.
All of this will only deepen the rift within the White House over how to proceed with the trade war. .So does China have the upper hand?
 Rare earth elements - neodymium, praseodymium, samarium and dysprosium - are key components in the production of miniature but powerful magnets needed to power engines, generators, radars, laser systems, missile guidance and satellite technology.
For example, neodymium magnets are used in the electric motors of drones, F-35 fighter jets and submarines. Without these magnets, factories in Detroit will not be able to produce drones, missiles and robots, - explained Freedom Finance Global analyst Vladimir Chernov.

Why China has decided to stop exporting rare earth metals,well it suspended the exports of a wide range of rare earth metals (REM) and magnets because of the actions in the trade war with the United States, the New York Times reported on 13 April. According to the paper, Beijing's action threatens to cut off supplies of components vital to the automotive and aerospace industries, semiconductor companies and military contractors around the world.

Analysts claim that such a restriction will cause significant damage to the US economy, particularly to the military industry.
He made it clear that creating alternative supply chains or developing new replacement technologies would require significant time - five to ten years - and investment, temporarily weakening the US defence position.
The economic consequences of China's refusal to supply rare earth metals are broader - in addition to the military sector, electronics, electric vehicles and the renewable energy sector (RES), where they are used in batteries and motors, will suffer, noted Pavel Sevostyanov, associate professor at the Department of Political Analysis and Socio-Psychological Processes at the Plekhanov Russian University of Economics.

The United States, which is 80% dependent on Chinese imports in this area, will face rising costs and the need to urgently seek alternatives - for example, resuming production on its own territory or in allied countries such as Australia or Canada, Pavel Sevostyanov added.
Another industry that could suffer from restrictions on the supply of rare earth metals is the space sector, added independent analysts Andrey Barkhota. One of the biggest companies in the sector is SpaceX, owned by billionaire and Trump confidant Elon Musk. This could further fuel the internal confrontation between influential people in the United States.
Elon Musk has repeatedly spoken out against the introduction of tariffs. His criticism has been directed not so much at Donald Trump, but at White House trade adviser Peter Navarro, who has been described as the main initiator of protectionism in the US administration. Elon Musk publicly condemned him on his social networks. Musk, for his part, noted that there was no tension in their relationship. (You can believe that if you like, but I certainly don't, given Musk's tendency to attack those he dislikes on his platform X.)
Rare earths are one of the few industries in which the availability of resources is of considerable importance, notes Andrey Barkhota. The availability of these chemical elements is crucial for the production of high-tech products such as batteries and electronic components.

In 2024, the United States will import 80-85% of the physical volumes of pure rare earth metals and their compounds directly from China, noted Pavel Pavlov, a senior researcher at the Presidential Academy's Center for International Trade Studies. He added that China's share of global exports of pure rare earth metals currently stands at 86%, and of rare earth metal compounds at 30%, making Chinese supplies difficult to substitute.
The deficit in rare earths or the dependence of the United States on external suppliers, especially China, creates a vulnerability that can be used in geopolitical games. That is why the United States is actively trying to strengthen its position in this area by investing in the development of deposits, technologies and the search for alternative solutions, such as cooperation with Ukraine or the Russian Federation in the field of their extraction, - believes Freedom Finance Global analyst Vladimir Chernov.
He explained that this is not just a question of economics, but also of national security, which is increasingly linked to access to critical resources.

Russia could, however, replace the lost volumes of rare earth supplies to the US, but there are many obstacles in this situation, independent expert Andrei Barkhota pointed out.
China could restrict supplies by threatening to reduce its exports to the Russian Federation symmetrically. In addition, in order to increase supplies of rare earth metals from the Russian Federation to the United States, anti-Russian sanctions will have to be lifted. The "two-chair" configuration that Russia is forced to maintain in the current situation may result in some of the side effects of trade wars falling on it," Andrey Barkhota believes.

The battle for rare earth metals is currently being fought all over the world. In Japan, for example, they are used in the automotive and electronics industries, noted Vladimir Chernov of Freedom Finance Global. In Korea, they are used in the technology sector, for example by Samsung and LG. And in Europe, they are needed for the development of green energy.
Russia has its own reserves to meet its needs - the military-industrial complex and the aerospace sector, summarises FG Finam analyst Alexey Kalachev.

What leverage do China and the US have now?
Restricting the supply of rare earths is a tough move by China in the trade war and confirms that Beijing will not back down. However, countries have few options to apply pressure.

Further increases in tariffs are possible, although they will not have such a significant impact, noted independent expert Andrey Barkhota. He added: "At the moment, tariffs are already prohibitive in a number of places. The main levers of pressure remain with the parties in terms of forming trade and economic alliances.
The first alliance is between China and the European Union. It is designed to compensate for China's lost exports by redirecting them to the EU. At the same time, the eurozone countries are very cautious about such prospects. And the second alliance is between the US and Russia. If America succeeds in weaning Russia from its close ties with China, we will have a huge market and the US will have the missing resource base," Andrey Barkhota explains.

Beijing's readiness for a tough escalation could prompt Washington to rethink its strategy, from negotiations to retaliation. According to Pavel Sevostyanov of Russia's Plekhanov School of Economics, in the long run this will encourage the West to try to reduce its dependence on China and speed up the development of alternative supply chains.That however is easier said than done and would take years to achieve if at all.
In the meantime, China and the US will most likely have to negotiate and try to avoid further escalation.