The news media and the political blogs are enraptured with handicapping the political races. No one has time to worry about real issues anymore. This is the silly season, when immigrant nannies and comments from comedians become “important”. When shady television hucksters are inexplicably taken seriously and hold huge political rallies.
Yet the real world, the one that operates on tangible things that make an actual difference in our lives, keeps chugging along.
While all of you were busy obsessing about political trivialities, the governments of the world were entering a global trade war. This development entered a scary stage yesterday when Brazil decided not to attend the coming G20 summit.
However, that was nothing compared to China’s latest move.
China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted shipments of some of those same materials to the United States and Europe, three industry officials said on Tuesday.
“The embargo is expanding” beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities. They said Chinese customs officials imposed the broader shipment restrictions Monday morning, hours after a top Chinese official had summoned international news media Sunday night to denounce United States trade actions.
China mines 95 percent of the world’s rare earth elements, which have broad commercial and military applications, and are vital to the manufacture of diverse products including large wind turbines and guided missiles. Any curtailment of Chinese supplies of rare earths is likely to be greeted with alarm in Western capitals, particularly because Western companies are believed to keep much smaller stockpiles of rare earths than Japanese companies do.
American officials had announced on Friday to investigate if China was violating trade laws by subsidizing their clean energy industry. China responded on Sunday with the statement that Washington “cannot win this trade fight.”
The war of words ended today. The trade war is on.