• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Tiny Magnets Could Be China's Destructive New Trade-War Weapon

Tiny Magnets Could Be China's Destructive New Trade-War Weapon

Tiny Magnets Could Be China's Destructive New Trade-War Weapon
June 7, 2019
Bloomberg

China could maximize harm on the U.S. economy not just by slashing flows of rare-earth materials, but by curbing supplies of small, powerful magnets that use them.

So-called permanent rare-earth magnets are the biggest single market for the minerals, and China accounts for more than 90 percent of global production. Their widespread use in everything from vacuum cleaners to vehicles and fighter planes means multiple U.S. industries could suffer if China chooses to block their supply amid a deepening trade war between the world’s biggest economies.

Magnetic Pull

A block on shipments of rare-earth metals and alloys to the U.S. is “manageable if ex-China processing gets built out swiftly,” Citigroup Inc. analysts including Oliver Nugent wrote in a report. “The impact gets much more serious were a ban to extend into rare-earth fabricated products — especially magnets and motors, or through third-party suppliers.”

China has signaled it’s gearing up to use its dominance of the global rare earths industry to hit back at U.S. measures that include the blacklisting of Huawei Technologies Co. The elements are often overlooked, but modern life would be impossible without them, Commerce Secretary Wilbur Ross said this week as the U.S. released a report that promised “unprecedented action” to ensure supply. China’s top state economic planning body is studying proposals to control exports and will put measures in place soon.

More on permanent magnets:

  • Permanent magnets come in two key forms, one based mostly on the rare earths neodymium and praseodymium, the other on samarium and cobalt, according to Citigroup.
  • They are used over other types of magnets because they can deliver more power relative to their size
  • Rare-earth magnets are considered essential to many military weapons

China’s magnet exports totaled $1.7bn last year, Citigroup said. While the U.S. imported about $395m, including $257m from China, that masks the potential economic hurt to downstream industries as magnets used in miniature motors perform essential functions in automobiles, wind turbines, and many home appliances.

“The industrial value add at risk if this supply chain gets disrupted is tough to quantify but likely runs multiples higher,” Citigroup said. “While Japan and others ex-China presumably have spare magnet capacity to divert more supply to the U.S., conversations with experts suggest the infrastructure and technical knowledge to respond quickly is very limited in scale.”

Add to that, many of the magnet plants outside China — the biggest are in Japan and Germany — are still reliant on China for their rare-earth inputs. Of 50,000 tons of mined supply outside China, only about 8,600 tons isn’t integrated with the Asian nation, Citigroup estimates.

RELATED CONTENT

RELATED VIDEOS

Logistics Logistics
  • Related Articles

    China Has a Big Weapon That It Hasn’t Used in the Trade War Yet: Tourists

    U.S. Ranchers and Meat Packers Could Be the Next Victims of the Trump Trade War

Bloomberg

Vast Swath of U.S. at Risk of Summer Blackouts, Regulator Warns

More from this author

Wake up to live
“Supply Chains in Crisis”
updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • Warehouse worker

    Why Higher Wages Alone Won’t Solve the Supply Chain Labor Shortage

    Warehousing
  • Adidas

    From Sneakers to Teslas, China Lockdowns Upend Global Supply Chains

    Coronavirus
  • Mobile App

    Podcast | Companies Are on a Shopping Spree for Supply Chain Software

    Technology
  • Medical drone

    Amazon May Be Proof That Delivery Drones Aren’t Practical

    Last Mile Delivery
  • ESG Guide

    Confronting the ESG Imperative in Supply Chains

Digital Edition

Scb may 2022 sm

2022 Supply Chain ESG Guide

VIEW THE LATEST ISSUE

Case Studies

  • 3PL Doubles Productivity With Robots to Fulfill Medical Supply Orders

  • E-Commerce Company Cuts Order Fulfillment Time by 40%

  • Fashion Retailer Halves Fulfillment Time With Omichannel Automation

  • Distributor Scales Business by Integrating Warehouse Automaton Software

  • Fast-Growing Fashion Brand Scales E-Commerce Fulfillment With Whiplash

Visit Our Sponsors

Yang Ming Alithya Barcoding
Blue Yonder BNSF Logistics Generix
GEP GIB USA GreyOrange
Here Honeywell Intelligrated Inmar
Keelvar Kinaxis Korber
Liberty SBF Locus Robotics Lucas Systems
Nvidia Old Dominion Parsyl
Redwood Logistics Saddle Creek Logistics Schneider Dedicated
Setlog Holding AG Ship4WD Shipwell
Tecsys TGW Systems Thomson Reuters
Tive Trailer Bridge Vecna Robotics
Whiplash    
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2022 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing