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
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.