Rare earth elements (REEs) are vital to production in sectors such as clean energy, defense and automobiles. These days, they are at the center of tensions between the world's two largest economies, the U.S. and China.
Although the relations between Washington and Beijing evolved quite positively in the face of tariffs brought in by U.S. President Donald Trump, with several rounds of trade talks they held earlier this year, the tensions flared up again earlier this month as China expanded its export controls on rare earths. Previously, in April and May, Beijing squeezed global automakers with export curbs on a range of rare earth items and related magnets.
Subsequently, Trump has this month threatened to slap China with a 100% levy due to its latest move, and concerns over the global supply of REEs remain.
China accounts for 90% of the world's refining capacity for rare earths and is also known to have the world's largest reserves, thus in a way being in a position to have a monopoly in the sector.
In a note on Monday flagging risks of supply disruptions, Goldman Sachs noted China also
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