China steps up threat to cut supply of rare earths to US

MANILA, Philippines — Chinese state media dangled Wednesday the threat of cutting exports of rare earths to the US as a counter-strike in the trade war, potentially depriving Washington of a key resource used to make everything from smartphones to military hardware.

The warning is the latest salvo in a dispute that has intensified since President Donald Trump ramped up tariffs against China and moved to blacklist telecom giant Huawei earlier this month, while trade talks have apparently stalled.

Huawei stepped up its legal battle on Wednesday, announcing it had filed a motion in US court for summary judgment to speed up its bid to overturn US legislation that bars federal agencies from using its equipment over security concerns.

Beijing had already dropped a big hint that rare earths could be in the firing line by showing images last week of President Xi Jinping visiting a rare earths factory in Ganzhou, central China.

State media made it clearer on Wednesday.

“Will rare earths become China’s counter-weapon against the unprovoked suppression of the US? The answer is not mysterious,” warned The People’s Daily, the Communist Party mouthpiece.

“We advise the US not to underestimate China’s ability to safeguard its own development rights and interests, and not to say we didn’t warn you.”

The state-owned Global Times warned in an editorial that the “US will rue forcing China’s hand on rare earths.”

“It is believed that if the US increasingly suppresses the development of China, sooner or later, China will use rare earths as a weapon,” the nationalist tabloid said.

Shares in rare earth companies surged in the Shanghai and Shenzhen stock markets on Wednesday.

An unnamed official from the National Development and Reform Commission, China’s state planner, had issued a cryptic warning late Tuesday.