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China is ready to hit back in the U.S. with rare earths: ruling party newspaper

BEIJING (Reuters) – China’s Communist y newspaper warned the United States on Wednesday that the country was ready for the use of rare earth metals back in their bitter trade war, saying in an extremely strongly worded comments “do not say we didn’t warn you”.

Chinese staff members to customize AMERICAN and Chinese flags before the opening of the session of the negotiations between the U.S. and Chinese trade representatives at the Diaoyutai State Guesthouse in Beijing, Thursday, Feb. 14, 2019. Mark Schiefelbein/Pool via REUTERS/Files

President Xi Jinping visit to a rare earths plant last week fuelled speculation that China would use its dominant position as a supplier of rare earth metals for the leverage in the trade war.

Rare earths are a group of 17 chemical elements that are used in everything from high-tech consumer electronics, military equipment.

While China has so far not explicitly said that it will restrict rare earth exports to the United States, the Chinese media has strongly implied this will be done, including the remarks of the editor-in-chief of the influential newspaper the Global Times on Twitter late on Tuesday.

In a comment header “of the United States, do not underestimate China’s ability to strike back”, the ruling Communist y is officially opened pointed out the “uncomfortable” the dependence on rare earths from China to the United States.

“Rare earths have a counter weapon for China to hit back against the pressure that the United States is on for no reason? The answer is not a mystery,” he said.

“Undoubtedly, the AMERICAN side wants the use of the products, made by China exported rare earths to counter and suppress China’s development. The Chinese will never accept it!” the paper added.

The industrial chain between China and the United States is highly integrated and highly complementary, and there are no winners in the war, it said.

“We advise the U.S. side not to underestimate the Chinese side the possibility for the preservation of the development of the rights and interests. Don’t say we didn’t warn you!”

The expression ‘don’t say we didn’t warn you” is usually only used by the official Chinese media to warn rivals over large areas of disagreement, for example, during a border dispute with India in 2017 and in 1978 for China invaded Vietnam.

China accounts for 80% of rare earth imports between 2014 and 2017, the United States, which has excluded them from recent rates, together with a number of other critical Chinese minerals.

Beijing, however, has raised tariffs on the import of U.S. rare earth metals from 10% to 25% from 1 June, making it less economical to process material in China.

Reporting by Ben Blanchard and Tom Daly; Editing by Simon Cameron-Moore

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