China urges South Korea: According to reports from the Korea Economic Daily, China has asked South Korean companies not to supply products containing rare earth minerals to U.S. defense firms. The report, citing government and company sources, stated that the Chinese government delivered this message in letters to Korean companies that manufacture a range of products, including power transformers, batteries, displays, electric vehicles, aerospace, and medical equipment.
Initial Report and Correction
Initially, the report stated that China’s Ministry of Commerce had warned Korean companies that they could face sanctions if they violated the export restrictions. However, the report was later corrected to state that the message was delivered by the “Chinese government” rather than specifically the Ministry of Commerce.
South Korea’s Response
South Korea’s industry ministry has said that it is checking with the Chinese government and South Korean companies to confirm the report. While the ministry has not confirmed whether South Korean companies have received an official letter from the Chinese government, it is taking steps to verify the information.
Still on China urges South Korea
China’s Export Restrictions
China’s recent export restrictions on rare earth elements are part of its response to U.S. tariffs. Exporters are now required to apply for licenses from the Ministry of Commerce, a process that can take several weeks to months. China produces around 90% of the world’s rare earths, a group of 17 elements that are crucial for various industries, including defense, electronics, and consumer goods.
Impact on the U.S. and South Korea
The U.S. government has stockpiles of some rare earths, but not enough to supply its defense contractors in the long term. South Korea, on the other hand, has reported having more than six months of stockpiles of some restricted rare earths, including dysprosium, which is used in special magnets found in the clean energy sector.
Upcoming Talks
Senior South Korean government officials are set to meet their U.S. counterparts in Washington to discuss tariffs. Meanwhile, China has warned countries against striking broader economic deals with the U.S. at its expense, adding to the complexity of the situation.
China’s Ministry of Commerce Response
The Ministry of Commerce has not responded to questions regarding the report, leaving many questions unanswered about the extent of China’s export restrictions and their potential impact on global trade.
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