So, China has put export controls on rare earths.
People think “well, we’ll just mine them ourselves” but it often isn’t that simple. Gallium is refined as part of the process of aluminum smelting, for example, and the US has no aluminum smelting industry left.
More generally speaking the world is unfolding as I predicted: it’s splitting into two trade blocs, a cold war is developing (the Syrian “uprising” is a cold war maneuver) and the US is trying cannibalize its satrapies: that’s what Trump’s tariffs on allies are about.
Since the 50s it was deliberate American policy to offshore industry to its allies, especially South Korea, Japan and Taiwan, but also to Europe and the Anglosphere to some extent. Now it wants to pull that back in. This has been especially noticeable, of late, in Germany, where heavy industry is shutting down and much of it is moving to the US.
The problem, of course, is that China’s cost structure is lower and they are pulling ahead technologically. The Chinese believe in technology in a way the West hasn’t since the 60s—it’s good to them. They want more robots, more drones and more automation. They’re not scared of automation taking jobs, they associate rapid technological advancement with prosperity.
The problem with bringing industry back to the US isn’t just cost-structure, it’s the so-called competency crisis and the sparseness of the vast numbers of small industrial suppliers. The ecosystem which supports and allows rapid re-industrialization doesn’t exist in the West any more. A simple example is that almost all of the world’s machine tools and basic electronics which are needed to do everything else are produced in China (with a small machine tool industry barely surviving in Germany.)
The West is going to have increasing problems with resources, as well. Most of the “South” would rather do business with China, for reasons we’ve discussed ad-infinitum. As the US cannibalizes its allies it will also have difficulty with trade: if Europe’s poor and everyone else would rather buy Chinese, who are you going to sell to?
Trump’s tariff plans aren’t exactly stupid, but they require real industrial policy at the same time and managing relationships with trade partners, including partners the US insists on treating as enemies, and Trump isn’t up for that, any more than Biden was.
So America will decline, but will decline less fast than its allies, and the world will split into two competing blocs. Only this time the “Western” bloc will be the weaker, less technologically advanced one.
Bill
Thatcher and neo-liberalism got rid of almost all British manufacturing and the skills to make things. It can only afford to import the 50% of its food and most of its energy due to the City of London’s ‘funny money’ [laundering] schemes. If Britain and the rest of Europe have almost no industry and resources, they will not be able to militarily support the US nor will they have any foreign currency to buy the expensive and 2nd rate military equipment [the war in Ukraine has shown that]. In cannibalizing and screwing its ‘allies,’ the US is destroying itself!
Mark Pontin
Succinct, Ian.
enoughisenough
The US will just bomb whichever country’s resources they need/want into compliance. As we always do.
The future is very bleak.
KT Chong
Story/rumor time.
In the second Obama term, Huawei, Xiaomi and ZTE were three rising-star Chinese phone manufacturers that were starting to make inroads into the US. The US government, either one or some of the national security agencies, summoned the three Chinese companies to a meeting or three separate meetings. The US government demanded the three Chinese phone companies, if they wanted to continue to sell their phones in the US market, that they would have to install a backdoor in all their phone and other products for the US government. Either all three or some of the three companies were willing to comply. The US government wanted to spy on US residents, which was fine by them; they were willing to comply with the US government when they operated inside the US.
However, the US government also demanded that they also have the same products and the same backdoor into the phones inside China. The US government wanted the CHINESE companies to work with the US government to use CHINESE-MADE phone to spy on Chinese residents, inside China, which would have included spying on top Chinese government officials who used phones from those three companies.
Of course all three companies refused to betray their country as the US government had demanded.
Back in China, Huawei immediately reported the incident to the Chinese government. Xiaomi, after an internal meeting, also reported it to the Chinese government later. ZTE did not.
The US, being as petty as it is, retaliated and wanted to punish Huawei for the disobedience. The US ordered Canada to detain the daughter of Huawei CEO.
On the other hand, the Chinese government rewarded both Huawei and Xiaomi for their loyalty and patriotism. Both companies have received government contracts and funds to expand their businesses, and that was how Huawei was able to expand into AI + semi-conductor and Xiaomi was able to expand into EV. Even thought the US punished both Huawei and Xiaomi for their refusal put a backdoor in their products inside China by banning their products in the US, they were able to grow and expand with assistance and rewards from the Chinese government – and, they expanded and dominated markets outside the US as well especially in the Global South with assistance and support from the Chinese government..
China did not punish ZTE but also did not punish ZTE. However, the US ban on ZTE has really hurt ZTE’s business overseas. Inside China, ZTE did not get any special support from the Chinese government. ZTE is still around, but they are no longer one of the biggest nor most successful companies in China.
Anyway, do not expect Xiaomi EVs to become widely available in the US. The US government still has not forgiven Xiaomi for the disobedience.
Wonder if the US government will make the same demand of BYD: put in a backdoor for us, or your cars cannot enter our market.
KT Chong
“China did not punish ZTE but also did not punish ZTE.”
Correction: China did not reward ZTE but also did not punish ZTE.
Nate Wilcox
The Empire Strikes Back: Syria seems like a hit production that seems likely to succeed in cutting off Hezbollah from Iran and pushing the Russians out of their Mediterranean bases.
Longer term it seems almost certain to reduce Syria to even more of a fragmented, failed state than it has been for the past decade.
I’m very curious if the Russians and (especially) Iranians will up their game in response. Ever since the suspicious death of President Raisi and the election of Pezeshkian they have seemed frozen and inert.
Curt Kastens
Ok Nate, but shouldn’t that comment be on the oh pen thread. Or is their an unseen connection between the events in Syria and the Chinese US trade war other than they are both part of the world wide power struggle.
someofparts
Will China, Russia and Iran leave Syria to be plundered and occupied?
I dunno. Let’s ask the gang at MSNBC. The only honest public voices are the ones getting paid ten of millions by the billionaires.
In other breaking news … the tooth fairy is not real .
Jorge
“Rare Earths” are not rare, they are everywhere but very very diluted. To mine them in quantity, you have to refine some commodity ore, and carefully catch the REs as they drop off the side of the bucket. Or something like that. So, all REs are derivatives of much larger mining operations, and their supply rates are entirely dictated by the rates of processing the matching commodity ores. You get what you get, you can’t say “I want to mine more lanthanum”.
Fun fact: high-quality neon and argon can be refined out of the atmosphere, but they are also embedded in iron-nickel ores. The Soviet Union built a very large iron-nickel processing plant and very carefully included neon&argon extraction processes- neon signs, right? As it happens, these gas outputs from the factory are very high quality, and suitable for easy downstream processing for use in argon-based lasers used in semiconductor manufacturing. (Like everything else in semiconductors, you really really don’t want impurities in your argon.)
Where was this plant built? Mariupol, Ukraine! That’s right, the first major battle of the SMO was over a source of raw materials needed for semiconductor manufacturing.
Also, notice that in this case neon&argon are, industrially speaking, “rare earths”: they are derived in very small amounts from processing much much larger amounts of an unrelated ore. The output volume is capped by the processing rate of the ore.
different clue
If K T Chong’s history of the DC FedRegime’s meeting with the Chinese cell phone companies is correct, it shows that the DC FedRegime was working for the Five Eyes Globalonial Plantation Empire as against working for America.
An aMERican government working for aMERica would have not even raised the issue or proposal of adding a backdoor of any kind for spying. An aMerican government would have informed the Chinese cell phone companies that if they wanted to sell cell phones in America, they would have to make them in America. And they would have to make all the parts in America. And share the technology with America. And under those conditions, they could then repatriate the profits to Mothership China as much as they liked.
The International Free Trade Conspiracy has reverse-developed America to the point where America is now an underdeveloped country. When most Americans become not-too-proud to accept that fact, then they might fight for a pro-American government in America. Would it not be ironic if that took the form of a Peoples Democratic Republic of America?
” America has stood up!”
StewartM
DC
When most Americans become not-too-proud to accept that fact, then they might fight for a pro-American government in America. Would it not be ironic if that took the form of a Peoples Democratic Republic of America?
Whether good or not, that’s about the last thing that would happen. More like the Fourth Reich, blaming imaginary internal enemies in an everlasting modern ‘witch craze’.
Changing a population’s ideology about what is “right” and “true” happens about as often as a people changing religion. Changing religions does happen (despite the idealistic naysayers, usually Christian ones, about how ‘you can’t stamp out a religion’) but usually it requires both carrot and stick. Rome, nor Germania, nor the Vikings, didn’t become Christian because of the common people seeing Christianity as the source of all goodness and light, but because either conquerors or their own governments shoved it down their throats and persecuted the old faiths out of existence with an intensity, scope, and furor not seen in the persecution of Christians by Roman emperors.
Which, btw, something similar happened in both Eastern Europe after WWII and in China, and post-1975 in Vietnam. You had the top representatives of the old ‘thinking’ (often priests) jailed and lots of others sent to ‘re-education camps’. Transitioning to a new paradigm about what is true and good and what is false and harmful doesn’t occur otherwise (not within a generation, at least, and maybe more)
StewartM
KT Chong
Interesting rumor about the three Chinese phone companies. It strikes me as ‘likely true’.
What I’ve noted is, even if one is trying to make one’s devices more secure, how each “advancement” in software and hardware makes that more and more difficult. On the newer file systems and SSDs, for one example, you can no longer securely erase individual files with confidence, unlike the older file systems and HDE/SATA hard drives. Yes, the new stuff is touted as better safeguarding data, but since I’ve never had an instance where files got corrupted in the decades I’ve used computers and phones, it seems to be sacrificing a good and necessary thing (the ability to destroy data on temporary and shared devices) for a tiny improvement against an unlikely event (data loss due to file corruption). For the latter, you still need backups even with the new technology.
Mind you, against an adversary as powerful as the US government, as Bruce Schneier has said, if they want you, ‘you’re screwed’, just like anti-theft car protection devices can be overcome by an expert car thief, all the anti-theft devices do is to make you a less attractive target. Moreover, like cyber-civil libertarians have long contended, if computing devices were harder to crack, then what we would have is simply the same situation as back in the 1960s, where yes, the government could wiretap phones, but it required someone physically tapping into the phone line with alligator clips and someone taking the time to listen in on conversations, and thus the technology limitations limited this ability to just 1000-2000 people a year rather than the ability to snoop on anyone with a click in the software.