US triumphs over China in minerals dispute

A top U.S. trade official announced Wednesday that the United States won its dispute with China over its restriction of rare earth minerals used heavily by the manufacturing sector.

U.S. Trade Representative Michael Froman said that the World Trade Organization (WTO) sided with the U.S. in its claims that China imposed export restraints on rare earth minerals, such as tungsten and molybdenum, violating global trading rules.

{mosads}“We will continue to defend American manufacturers and workers, especially when it comes to leveling the playing field and ensuring that American manufacturers can get the materials they need at a fair market price,” Froman said. 

Rare earths are key inputs in a multitude of U.S.-made products, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum and chemicals.

The United States initiated this WTO dispute in 2012, in cooperation with the European Union and Japan, after China drastically reduced its export quotas leading to a spike in world prices and major disruptions in the global rare earths market.

“China’s decision to promote its own industry and discriminate against U.S. companies has caused U.S. manufacturers to pay as much as three times more than what their Chinese competitors pay for the exact same rare earths,” Froman said.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) said the WTO’s decision “sends a strong message to China that its mercantilist trade restrictions on rare earth elements have no place in the 21st century.”

“To compete in the global, high-tech economy for decades to come — and secure the jobs that come with it — the United States also needs to develop a stable rare earths supply chain here in America,” he said. 

Sen. Lisa Murkowski (R-Alaska) said that while the ruling was a good one for the United States “it by no means resolves the fact that we are almost entirely dependent on a foreign nation for our supply of rare earth elements.”

She urged passage of the bill she has cosponsored with Wyden that would aim to ramp up U.S. production.

“We can file trade complaint after trade complaint, but there is no substitute for the steps that we know we must take to reconstitute our own domestic supply chain,” she said.

The American Iron and Steel Institute (AISI) also praised the WTO decision.

“These metals include critical raw materials for steelmaking, and the export restrictions clearly favor Chinese producers already dealing with a massive overcapacity in steelmaking,” said AISI President and CEO Thomas J. Gibson.  

“We are pleased to see the U.S. government working with our allies to address China’s unfair trade practices and hope that the vigorous enforcement of the global trade rules continues.”  

House Democratic Whip Steny Hoyer (MD) called the ruling “another strong effort by the Obama administration to hold China accountable for circumventing international trade agreements.”

“The enforcement of trade rules is critical to ensuring a level playing field for American workers and businesses, and it must remain a top priority.”

This post was updated at 5:35 p.m.