Trump administration announces new tariffs on Chinese chips and electronic components
The recent geopolitical events happening across the world have revealed the weakness of the U.S. dependence on a single source for the majority of its rare earth needs. Because of this, the Trump administration is planning to build a strategic reserve for critical minerals , similar to the oil reserves that the U.S. built in 1975 after the price shocks that were brought by the OPEC oil embargo from 1973 to 1974. It also founded the Pax Silica initiative designed to pivot the global semiconductor supply chain away from China, with India officially joining the effort this month. The Pentagon also announced a plan to use AI to set reference prices on rare earths as a way to counter supposed Chinese pricing manipulation.
This just shows how rare earths have taken center stage in global geopolitics, becoming a strategically important resource alongside oil. China had a headstart in extracting, processing, and refining these materials, meaning it has an edge on almost every other country on earth and provides nearly 61% of the global supply. This has got the U.S. and its allies, like Canada and Australia , scrambling to find and develop alternatives — but doing so will likely take several years, if not decades, before they catch up.
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Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/semiconductors/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/semiconductors/chipmakers-still-suffering-from-rare-earth-shortages-says-report-us-china-trade-truce-apparently-still-hasnt-eased-pressures-despite-agreement-taking-place-in-october-last-year#main
- https://www.tomshardware.com
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