KUANTAN, Malaysia — Amanda Lacaze grabbed her iPhone and rattled off names of special minerals in it. The screen was polished with lanthanum and cerium. The inside has a magnet with neodymium and praseodymium.
Those minerals likely came from China. Lacaze’s job is to give the world an alternative source, in case a global trade war spirals out of control and China cuts off supply. Right now, she can’t.
Her company, Lynas Corp., provides a fraction of the rare earth minerals China produces. That source isn’t a sure thing: The work is volatile, complex and expensive. Lynas once came close to collapsing.
The Trump administration amped up its trade fight with China on Tuesday when it threatened tariffs on another $200 billion in Chinese goods — from frozen catfish fillets to copper wires. China has threatened to match, dollar for dollar.
It has other ways to retaliate beyond tariffs, like refusing to buy U.S. products or intensify regulation of U.S. companies in China. It could offload pieces of its portfolio of Treasuries, rattling the bond market.
Beijing could cut off key parts of the global supply chain. China is the major supplier of mundane but crucial materials needed in the world’s factories, like arsenic metals, for semiconductors; cadmium, found in rechargeable batteries; and tungsten, found in light bulbs.
A trade war risks putting minerals in the conflict, giving China a way to get back at the United States by cutting off supplies to U.S. companies. Rare earths are among the list released Tuesday of Chinese-made goods the Trump administration may tax.
China has used control of rare earths as leverage before. In 2010, it stopped exports to Japan for two months over a territorial dispute.
It is hard to go a day without rare earths. They are found in smartphones, televisions, hair dryers, electric and hybrid cars.
Even if it doesn’t disrupt the supply, China will likely keep its grip over the market for rare earths for a long time to come. It dominates research and development of minerals, Lacaze said.
“I think there’s about 100 Ph.D.s in rare earths working in applications inside China and working in technology development,” she said. “To my knowledge, do you know how many Ph.D.s there are outside of China?” With her fingers, she made a zero.
That means depending on China for a while, she said.
“It doesn’t scare me, but it should scare policymakers,” she said.