In recent days, U.S. President Donald Trump has been engaged in a bit of back and forth battle when it comes to imposing tariffs on China, specifically, slapping a 125 percent levy on that country – after which China imposed its own retaliatory tariffs of 34-59 percent on the U.S. As one might imagine, this impacts automakers in various ways, whether it be making parts and raw materials more expensive to procure or increasing the production costs of vehicles, in general. Turns out, Ford EV production may soon also be impacted by a newly imposed rare earth metal export ban, too.
According to The New York Times, China has now opted to suspend exports of various minerals and magnets to other countries as that country’s government works to draft a new regulatory system. That new system could permanently ban supplies from reaching certain companies, including American military contractors, and comes in direct response to U.S. tariffs. Depending on how this pans out, automakers could face problems assembling cars and vehicles that utilize electric motors requiring those magnets in that process.
In addition to impacting Ford EV production, these heavy rare earth materials are needed for various other components – such as steering systems, headlights, spark plugs, and capacitors, which are used in a wide berth of electronic items. Some U.S. companies have been told that it will take 45 days to issue export licenses before these rare earth metals and magnets would resume shipping to other countries.
Much like the COVID-19 pandemic exposed companies like Ford that didn’t stockpile semiconductor chips prior to worldwide supply chain issues commenced, this new export issue could certainly make them regret not doing so, or at least, sourcing materials from other places. Many American companies opt not to stockpile rare earth materials simply because they’re quite expensive. China also controls 99 percent of the world’s supply of heavy rare earth materials, as well as 90 percent of rare earth magnets on the planet.
Comments
Well, I’m not sure where we as a country are as far as recycling rare earth materials, but for awhile there was a buzz about augmenting newly mined minerals with recycled. There were companies that were making headway on best practices for recycling, etc. Where are we now? I would imagine that with EV’s and Hybrids having been in the marketplace for some time now, where does this industry stand, and what if any impact is it having?
It also occurs to me the U.S. begged out of some sort of agreement with China for mining rights in the Pacific Ocean for rare earth minerals. Apparently, there are nodules in varying sizes of concentrated rare earth minerals at the bottom of the deepest parts of the ocean, with coalesces due to high pressure. Farming these nodules is in many ways less invasive than traditional mining. So, what about this botched negotiation?
I got some magnets from around the house to sell to Ford.
production may not also be impacted by a newly imposed rare earth metal export ban, too.
Does this sentence read incorrectly? Isn’t it saying production may not be impacted……
might have meant to say: production may also be impacted……
Get in bed with a communist regime and not have a contingency plan? You can probably buy some on Amazon. 😁