Darren Gersh, Nightly Business Report
SUSIE GHARIB: If you use high-tech products or own shares in high-tech companies, you’ll want to keep an eye on the trade case the U.S. filed against China today. It targets Chinese exports of rare earth minerals. Those minerals are critical to high-tech manufacturing, and China controls the world’s supply. Darren Gersh reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Your cell phone wouldn’t power up without rare earth minerals, and military hardware like this drone wouldn’t hit its target without rare earth minerals, which is why the president wants U.S. companies to have access to these vital materials.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now, if China would simply let the market work on its own, we’d have no objections. But their policies currently are preventing that from happening, and they go against the very rules that China agreed to follow. Being able to manufacture advanced batteries and hybrid cars in America is too important for us to stand by and do nothing.
GERSH: Manufacturers of glass for touch-screen computers have moved to China, in part, because it produces almost all of the world’s rare earth minerals. And the U.S. complaint filed with the World Trade Organization claims China uses quotas, duties, and red tape to restrict exports that might help high-tech companies move back to the United States. Jeff Green represents companies that want to mine for rare earth minerals here in the United States. He says today’s trade complaint may result in lower prices for manufacturers, but it won’t break China’s lock on the market. Green says the trend to China is one reason Molycorp, a large U.S. producer of rare earths, is now expanding overseas.
JEFF GREEN, LOBBYIST, J.A. GREEN & COMPANY: The largest producer of rare earths, just last week, announced the intention to buy a company with operations in China, which will actually exacerbate the export of rare earth materials from the U.S. into China, further feeding their supply chain. That’s a capability we need to develop here at home.
GERSH: The Chinese say they are trying to conserve a scarce natural resource and protect their environment. But the Obama administration dismisses those arguments, and seems determined to broaden the pressure on what it calls “unfair Chinese trade practices.”
ESWAR PRASAD, ECONOMICS PROFESSOR, CORNELL UNIVERSITY: Until now, the battleground used to be currency issues and the fact that China was restricting imports of goods from the U.S. and other economies. But now, the battleground has shifted to China’s export restrictions.
GERSH: The European Union and Japan joined the United States in calling for negotiations with China at the World Trade Organization, a very strong signal to Beijing of just how important this trade fight is to the world’s most advanced economies, and their high-tech industries. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.