Highlights
- US-China trade tensions are intensifying over critical minerals and technology sectors, with both nations using national security claims to justify trade restrictions.
- BRICS nations may form alternative supply chains and challenge Western-dominated trade institutions in response to ongoing economic decoupling.
- Global regions like Africa and South America could become pivotal as nations compete for control over essential mineral resources and strategic autonomy.
A recent Op-Ed entry (opens in a new tab) in the South China Morning Post by Abhishek Sharma (opens in a new tab) discusses the escalating trade tensions between China and the U.S., particularly in the critical minerals and technology sectors. The author, an international economic development-focused professional, argues that China’s recent export controls on key minerals signal its readiness for a more direct trade confrontation as Donald Trump prepares to expand U.S. sanctions on Chinese tech industries. The key point is that both nations are leveraging national security claims to justify trade restrictions, which could deepen economic decoupling and destabilize global supply chains.
Will export controls be the weapon of choice between the Trump-represented America and China? While the analysis highlights the strategic importance of critical minerals and mutual vulnerabilities, it overlooks potential global responses, such as alliances forming to counter China’s dominance. Will the U.S., for example, strike relationships to deepen ties in Brazil, Malaysia, and elsewhere?
The author’s perspective suggests a bias towards emphasizing U.S. vulnerabilities and portrays China’s moves as primarily reactive. The analysis might underestimate the potential of domestic or allied critical mineral strategies to mitigate these risks, and it lacks a broader assessment of how global markets and non-aligned nations might adapt to the escalating trade war.
A U.S.-China trade war over rare earth minerals could reshape global supply chains, prompting significant responses from key players like BRICS nations and Germany. Within BRICS, China may leverage its leadership to consolidate control over critical mineral markets, forging preferential trade deals with allies like Russia and Brazil.
Russia could capitalize on its resource wealth to supply minerals and bypass Western sanctions, while India might focus on diversifying imports and building domestic refining capabilities to reduce reliance on China and the U.S. Together, BRICS nations could strengthen trade agreements, establish alternative supply chains, and challenge Western-dominated institutions like the WTO.
Germany and the EU would likely focus on reducing dependence on both China and the U.S. by diversifying their supply chains, investing in African and Greenlandic mining projects, and advancing rare earth recycling and substitution technologies. Germany might also use its diplomatic influence to mediate between the U.S. and China, advocating for multilateral agreements to stabilize trade.
At the same time, the EU could accelerate policies under its Critical Raw Materials Act to boost domestic capabilities and strengthen strategic autonomy. Would the USA and EU collaborate more closely?
Globally, resource-rich regions like Africa and South America could become pivotal as nations compete for access to untapped reserves.
Multilateral organizations might see renewed calls for frameworks to govern critical mineral trade, preventing unilateral dominance. These developments signal a shift toward a more multipolar landscape, where emerging powers and traditional allies vie for control over essential resources.
Daniel
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