US Focusing on Rare Earths and Semiconductors

The US president Joe Biden will direct his administration to conduct a review of key U.S. supply chains, including those for semiconductors, high-capacity batteries and rare earths to ensure that the U.S. does not rely too much on rival countries including China in terms of key technologies, anti-epidemic materials, and raw materials.

The U.S. government department will conduct a 100-day review in accordance with Biden's executive order. The review targets are mainly government contractors and private industries to ensure that U.S. manufacturers can obtain a safe and sustainable supply of raw materials, especially in terms of anti-epidemic materials such as masks, testing supplies, and vaccine raw materials, must be guaranteed to be imported.

President Joe Biden will direct his administration to conduct a review of key U.S. supply chains, including those for semiconductors, high-capacity batteries, medical supplies and rare earth metals. The assessment, which will be led by members of Biden’s economic and national security teams.

The action, which will focus both on government contractors and private industry, aims to ensure the United States can supply the goods it needs to combat the COVID-19 crisis, as well as other critical technology and raw materials, the sources said.

Not only that, US government agencies will draft plans within a year to further improve and strengthen the US supply chain, or to strengthen the U.S. domestic manufacturing capabilities through cooperation with allies. American officials revealed that relevant measures will be formally implemented within the next few weeks at the earliest, which is also Biden's promise during the campaign.

The U.S. Department of Energy estimates that in 2018 the global REE market was valued at approximately $8 billion. The U.S. imports all of the REEs it consumes, about 80% of which comes from China. In 2018, the DOE said that the nation imported about $160 million worth of rare earth compounds and metals, excluding yttrium and scandium. However, the real economic cost of REEs is deceptive insomuch that the nation imports nearly all of its REEs in the form of finished goods rather than raw material. When put in these terms, the U.S. Department of Energy estimates that the U.S. imported $2.6 trillion of finished goods containing REEs in 2018.

As for the materials that will be considered as a crucial review, US officials revealed that rare earths, semiconductors, and other important minerals, which are important raw materials for electronic products, are the main areas of US review. Although the official did not name China, because China is the world's largest exporter of rare earths, the outside world naturally thinks that China will become a focus of attention.

It is worth noting that the Ministry of Industry and Information Technology of China announced the latest "Regulations on the Management of Rare Earths" which pointed out that rare earth metals are of irreplaceable significance for the transformation of China's traditional industries, the development of emerging industries, and the advancement of defense technology industries.

Not only that, according to data from the General Administration of Customs of China, China's exports of rare earths in 2020 will be 35,448 metric tons, a 23% drop from 2019 and a five-year low. China has upgraded rare earth to important strategic material. The administrative order that Biden will announce soon can be said to be a countermeasure to China's pre-planning.

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