The Korea Economic Daily reported that Beijing made requests to South Korean companies to stop sending Chinese rare earth mineral products to U.S. defense firms. The paper originally reported that China’s Ministry of Commerce threatened sanctions against companies that violated the policy but later changed the source to the Chinese government. The corrected version of the report specified that the warning originated from Chinese government authorities instead of a particular ministry.
The South Korean Ministry of Industry maintains a reserved stance by confirming the information through communications with both Chinese authorities and domestic companies. The South Korean Ministry of Industry has not received official confirmation about Chinese government letters sent to domestic companies.
The trade tensions between the United States and China have led to this problem emerging. China implemented fresh export restrictions on rare earth elements during the beginning of this month, which are essential components for weapons systems and electronics as well as clean energy technologies. China’s Ministry of Commerce demands licenses from exporters who must navigate a complex process that takes an unclear amount of time.
China controls the worldwide rare earth market through its position as the supplier of 90% of all global rare earth materials. The United States currently holds limited stockpiles that cannot sustain extended defense production operations. South Korea, which serves as a major exporter of batteries, aerospace equipment, and electric vehicles, announced earlier this month that it possesses more than six months of stockpiles for restricted elements such as dysprosium and other materials.
South Korean senior officials will meet with their U.S. counterparts in Washington on Thursday to address trade taxes and supply chain durability. China warned other nations through a broad statement that economic cooperation with the United States, which threatens Beijing’s interests, should be avoided.
The situation reveals an increasing split in worldwide supply networks that specifically targets fundamental raw materials needed for advanced technological developments.
