China to Impose Rare Earth Sanctions on US Lockheed Martin

According to China's Global Times, China announced that it would impose rare earth sanctions on the US arms manufacturer Lockheed Martin for reaching a pre-agreement worth $620 million with Taiwan for repairing and refurbishing PAC-3 missiles. China would cut off the supply of materials, including rare earths, and restricting Lockheed Martin's material suppliers' operations in China.

He Weiwen, executive director of the China WTO Research Association, told the Global Times that the company is the first American company to be sanctioned directly by China since the beginning of the Sino-US trade war. He said that in addition to specific sanctions, China to show that the United States "cannot deal with China as whatever it wishes."

China's aviation industry expert Wang Yanan told the Global Times that Lockheed Martin is an American military enterprise that manufactures high-end weapons and equipment, and does not have much direct business dealings with China. But he believes that China may restrict Martin's supply chain, because Martin inevitably to import various non-metals, metals, and rare earth materials from China through suppliers.

Nathan Picarsic, the founder of Horizon Advisory, recently told The Wall Street Journal that China may control the rare earth industry. The State Department last week approved a possible $620 million foreign military deal for the island to buy parts to refurbish previously sold Patriot Advanced Capability-3 (PAC-3) missiles so that they can last 30 years.

"China firmly opposes the US arms sales to Taiwan and we urge the US to stop doing so and to cut its ties with Taiwan to avoid harm to bilateral relations and peace and stability across the Taiwan strait. We will impose sanctions on the main contractor of this sale," Chinese foreign ministry spokesperson Zhao Lijian said in a press conference.

Wang Yanan said that China's sanctions on Lockheed Martin would have a deterrent effect on other US arms companies and prohibit them from selling weapons to Taiwan. For example, companies like Boeing that have direct business dealings with China will be more severely affected if they are sanctioned by the Chinese government.

According to the Straits Times, China accounts for 95% of the global output of the rare earth industry, and 80% of the US's rare earths supply comes from China. The report also said, "From Lockheed Martin's F-35 Joint Strike Fighter to missiles, the key components of laser targeting equipment require rare earth materials."

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