EU/US will lose trade war with China

In the current escalating trade war between the US,The EU and China be a winner or three losers? The US continues to impose sanctions on the sales of powerful micro chips to China,it also encourages,indeed some say coerces and bullies its vassals like the Netherlands and Japan not to sell equipment for the manufature of chips to them also. The EU for its part has slapped large tarriffs on Chinese electric vehicles,solar panels and other equipment for the new NET Zero Green Energy drive.

Now China is quietly assesing its options and they have many, alreay they have restricted the export of certain rare earth metals that are essential for the manufacture of micro chips,solar panels and a whole host of modern electronic goods and if it goes further it will not matter if the US bans the sale of the chips as the US and its allies will not have the ability to manufacture the chips themselves insufficient quantities for even their own consumption. Lets bear in mind that the West imports practically everything needed to make the chips, yes all the ingredients from silicone,rare earths and even the nuclear fuel for the electricity to power the plants and the ingredients for wind turbines and solar panels.

It is cannot be overstated the significance of China,which is the world's foremost producer of numerous raw materials, including graphite, lithium, and refined copper, to the supply chains of the technology sector.
Beijing's control over the extraction and production of these materials, both in China and abroad, including in Africa, is a key factor in their significance. This is occurring in parrallel with the expansion of the IT sector. It is understandable that this situation gives rise to concern and frustration in the West, particularly in the United States, which has identified China as a key competitor.
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According to Jon Harrison of TS Lombard, Beijing has been tightening its grip on rare earths and other critical technology commodities over the past seven years. This includes comprehensive control, including permits for exploration and extraction, and regulation of the entire process. As a result of Beijing's increasingly restrictive policies, Western companies are facing greater challenges in accessing these resources.They don't produce enough domestically so are dependent on imports and China is the largest plus most of the other suppliers who are much smaller cannot replace the volumes that China has if the US or the EU turns away from China or it decides to punish the US and EU with counter sanctions

According to the International Energy Agency (IEA), China controls approximately 80% of the global graphite supply and 60% of rare earths. However, this is mainly due to its significant refining and processing capacity.

IEA analyst Amrita Dasgupta states that China is the world's leading producer of refined copper, lithium, cobalt, graphite and rare earth magnets. Beijing is responsible for the production of 99% of the graphite used in batteries, in addition to over 60% of the lithium, 40% of refined copper, over 80% of refined rare earth magnets and 70% of refined cobalt.
Furthermore, China exercises complete control over the entire graphite anode supply chain.
It is also the world's largest antimony producer last year accounting for more that 48% of global production. Antimony is also used in the production of a range of semiconductor devices, solar batteries, ceramics and glass.US and EU antimony consumers are heavily reliant on imports, with China accounting for a significant portion of these. According to 2023 data, Chinese antimony supplies made up 35% of the antimony ore and concentrate imports, as well as 63% of the antimony oxide, finished metal, and powder imports. 

Another IEA analyst and expert on important minerals and raw materials, Shoban Dir, forecasts that China will maintain its dominant position in the refined copper market until at least 2040. Mr. Dir is similarly confident that Beijing will overtake Peru in copper production. IEA analysts are confident that China will retain its dominance in the nickel market, despite the fact that 52% of the world's nickel production is currently concentrated in Indonesia. It is worth noting that Chinese businesses accounted for 40% of the metal's production in Indonesia last year.
China's share of the lithium mining and production market grew from 6% in 2016 to 17% in 2023. Analysts anticipate that Beijing will surpass Chile to become the second-largest lithium producer globally by 2025-26.

"The significance of critical minerals to China is highlighted by the rapid growth of mining investment both domestically and internationally," states Deere. To illustrate, Chinese business investment in mining related to the Belt and Road Initiative reached a peak in 2023 at $19.4 billion, representing a 160% increase (year on year).

Beijing is making significant investments in foreign mining operations, with a particular focus on acquisitions. China has been particularly active in Africa, with investments of $10 billion in the first half of 2023.

Many of the aforementioned metals are essential for the production of electric vehicles, where China also holds a leading position. Two-thirds of electric cars are assembled in China. China is the dominant player in the global battery industry, accounting for 85% of production, 90% of cathodes and 98% of anodes. Additionally, the country is a leading producer of solar panels, wind turbines and hydrogen electrolyzers, which are closely related to the "green" transition.
The 14th Five-Year Development Plan of the PRC outlines a significant investment of $6 trillion dollars in the "green" economy.
While silicon is not a scarce resource, its significance to the contemporary economy is difficult to overstate. Beijing also enjoys a dominant market position.

A significant aspect of China's comprehensive control over numerous crucial and scarce metals and minerals is its capacity to influence prices through its dominant market position. By reducing prices, Beijing is able to gain the upper hand over its competitors.

China's dominance in the markets for critical materials is a significant factor in the trade war that the US has declared against China. In response to China's export-based development model, which relies heavily on these metals and minerals, Washington is seeking to sever all economic ties with Beijing.
Taiwan maybe the worlds leading produce of high end chips but without the raw materials all its technology is useless so it look like China is a an advantage in this illconcieved and ill thought out trade war. In my opinion it is the US and the EU are are going to lose but them again given the history of the past 3 decades of their behaviour I am not suprised.

Jon Harrison believes that while China has rarely used its dominant position in critical materials markets to achieve geopolitical goals since 2017, it has gradually increased its control over them. However, Beijing has recently begun to utilise this strategy more frequently in response to Washington's restrictions on high-tech supplies to China and equipment for producing advanced chips.

So the US and the EU may think that they can harm China with their sanctions and tarriffs but it is China that has the upper hand and it has the rest of the developing world