Lithium is not the only rare earth mineral involved in the restriction of supply.
Primary to flat panel TV's, which, as we all know, are the primary current design. There is Neodymium to make the stronger magnets. This is the 2nd challenge to China's restrictions on exports and covered in this case are tungsten and molybdenum, but there is at least 17 minerals of concern.
I do agree that China sees an opportunity and is using that to its advantage. I believe we can all understand that. The issue is the playing field rules. As stated, we all live in a "Global economy", and trade regulations are, in part, there to provide products from one country with available exports to others without. Object is to open worldwide markets and stabilize world economies. It is not there to provide open markets and trade benefits for just one country.
China has found a way to get around the tariff rule of subsidized manufacturing. Just increase the cost of other countries products. They will find out that other countries will not stand for this, and tariffs will increase and imports will decrease accordingly, out of self preservation.
Personally, I would like to see the majority of clothing, steel, and similar mfg. imports dramatically reduced to allow the U.S. mfg. to re-ignite. (I am not sure that I would want auto mfg to go this route, as forign imports is what has helped push the Big Three to increase reliability and durability of their products.) Sure, this would raise prices quite a bit initially, but as our economy starts to boom, prices would stabilize. As the free market system of supply and demand reacted, competition would increase, decreasing costs and further increasing employment and therefore the overall economy. Only issue then would be to not repeat the past by having excessive wages, benefits, and pensions outstrip the overall standard of living (Which was one of the driving forces behind outsourcing to other countries.) There can be a happy medium.Once again we would see the 'Archie Bunker" era where one spouse is all that is required to support a family and pay the mortgage.
But I digress....
Either way, if any country is to take advantage of the benefits of the WTO and global economy, they need to abide by the majority rules, or leave and be on their own.
Lithium is not the only rare earth mineral involved in the restriction of supply.
Primary to flat panel TV's, which, as we all know, are the primary current design. There is Neodymium to make the stronger magnets. This is the 2nd challenge to China's restrictions on exports and covered in this case are tungsten and molybdenum, but there is at least 17 minerals of concern.
I do agree that China sees an opportunity and is using that to its advantage. I believe we can all understand that. The issue is the playing field rules. As stated, we all live in a "Global economy", and trade regulations are, in part, there to provide products from one country with available exports to others without. Object is to open worldwide markets and stabilize world economies. It is not there to provide open markets and trade benefits for just one country.
China has found a way to get around the tariff rule of subsidized manufacturing. Just increase the cost of other countries products. They will find out that other countries will not stand for this, and tariffs will increase and imports will decrease accordingly, out of self preservation.
Personally, I would like to see the majority of clothing, steel, and similar mfg. imports dramatically reduced to allow the U.S. mfg. to re-ignite. (I am not sure that I would want auto mfg to go this route, as forign imports is what has helped push the Big Three to increase reliability and durability of their products.) Sure, this would raise prices quite a bit initially, but as our economy starts to boom, prices would stabilize. As the free market system of supply and demand reacted, competition would increase, decreasing costs and further increasing employment and therefore the overall economy. Only issue then would be to not repeat the past by having excessive wages, benefits, and pensions outstrip the overall standard of living (Which was one of the driving forces behind outsourcing to other countries.) There can be a happy medium.Once again we would see the 'Archie Bunker" era where one spouse is all that is required to support a family and pay the mortgage.
But I digress....
Either way, if any country is to take advantage of the benefits of the WTO and global economy, they need to abide by the majority rules, or leave and be on their own.
I would guess that when it comes to Rear Earths (which are not rare), it's a tad more simple. The first part of your comment is right. They produced a surplus that made it economically undesirable for other countries to mine Rare Earths. Then they cut back to protect their own industries (they admitted that). Now the prices are high enough for non-China mines to start digging. All that makes sense. The catch is that it will take two or three years for all of the many Rare Earth minerals from U.S. and Australian mines to flow out to the market.
The essence of the issue recognizes how China created a surplus of rare-earths by essentially dumping, thus diminishing world-wide price; then after their competition folded due to inability to make a profit, China created a world-wide shortage. We recognize the need for rare-earths and acknowledge China's position of strength and again, find ourselves powerless to take the steps necessary to effect change. We will never withhold Rice, Corn, Wheat, Student Visa's, trade opportunities, whatever, in retaliation for China's violation of their agreement to the WTO charter. We find it is environmentally undesirable to (fill in the blank), thus look to other countries to provide this resource. We then become resentful when those other countries balk at complying with our definition of "fair".
etmax and 3drob, I agree with you, not just about China's membership in the WTO, but about the fact that we've sent most of our manufacturing there, as well as our debt. I have great respect for the country and its people, culture and history, but I don't think much of the management and its dismal history in human rights, political suppression, and environmental devastation.
Like TJ, I would prefer to vote with my/our wallet. But strategies we can pursue as individuals in a free market society don't translate well to international politics and the world stage: the scale and the rules are different.
Uneven distribution of resources is why individuals and nations trade in the first place. TJ, I would agree with you if China had not joined the WTO, agreed to abide by its rules, and then broken those rules. China seems to want to have its cake and eat it too, in this case and in many others. And yes, we DO have to do business with them, at least in the short term: as Rob has pointed out, restarting those mines will take at least a couple of years to make a difference in supply. Right now, they basically do have a monopoly. Plus, we are now formal trading partners with them, as members in the WTO, which comes with a set of duties and responsibilities, as well as rights. And like it or not, we are all now living in a global economy.
Whether WTO penalties or sanctions will be strong enough to force China to behave is clearly up to China as much as it is to the US, the EU, Japan, or the WTO. This is not grade school where they can be sent to detention: this is the international arena where nations are expected to behave like adults, including honoring your agreements and keeping your promises, and to do so voluntarily. When they don't, things get sticky. In this case, that may mean litigation. That's better than in the past, when it often meant war.
Beth, while it's not possible to second-guess what the US government, EU and Japan expect specifically, the fact that all three of them have filed nearly identical actions indicates that they at least hope to bring the matter to a head with China. And it's not just the US facing off with them. The EU has already tangoed with China on this subject for a different set of raw materials without much result: the WTO ruled in the EU's favor and against China's export restraints on those materials in January this year:
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