Here’s how Biden follows Trump against China on rare earths and chips
The Biden administration is on the same line as the Trump administration on rare earths and semiconductors, the nerves of the tech war against China. Giuseppe Gagliano's analysis
The president of the United States signed a presidential decree on Wednesday 24 February to secure American supply chains.
A study, which will last one hundred days, is underway on three decisive sectors: electric batteries, rare earths, used in the production of modern materials, and pharmaceutical products. In particular, semiconductors are the nerves of the technological war against China.
Americans have noted with satisfaction that the Chinese are still not up to par – their phone makers Huawei and ZTE were penalized when the Trump administration decided to block them from accessing the most modern chips. The Biden administration is on the same line, trying to stop them from catching up.
Americans are also facing difficulties, as the national champion Intel has been left behind by Korean (Samsung) and Taiwanese (Taiwan Semiconductor Manufacturing Company) competitors for physical production of the most efficient microprocessors (many American groups only make their own design) . This problem was known to Donald Trump: in June 2020, US lawmakers on both sides offered to help semiconductor manufacturers for an amount of $ 20 billion to be produced on American soil.
However, the current shortage has little to do with the current technology race: for example, the microprocessors that the automotive industry lacks were largely produced by the first Chinese manufacturer SMIC. The latter needed American equipment, instead it had trade sanctions imposed by the Trump administration, which did not improve the global shortage. The Americans are therefore partly responsible for their bad luck.
So far, the Biden administration has not lifted any of the sanctions imposed on Beijing.
However, unlike Donald Trump, President Biden constantly mentions coordination with allies and his teams are in talks with Taiwan to resolve the crisis. But this is a difference that must be carefully considered and not exaggerated or even exaggerated: multilateral cooperation serves in fact to strengthen American hegemony in an anti-Chinese function.
However, between security concerns and protectionism, the dividing line is narrow. Sure the Chinese are working hard on the electric car, but the Americans are well supplied. Although the United States is an exporter of electric vehicles, it is not the leader in the supply chain associated with battery manufacturing. The US could make better use of its lithium reserves and industrial know-how to expand its domestic production, the White House points out.
Joe Biden, with his project "Build Back Better", pursues the strategy launched by Donald Trump with the slogan "Make America Great Again". This is a complete break with the slogan on the back of Apple iPhones: “Designed in California, built in China”.
As for the rare earth sector, it is more complex to reclaim: these earths contain essential materials in information technology, aeronautics and all modern materials. But these are present in small quantities, which requires the operation of gigantic unprofitable mines and as a corollary high pollution. Not surprisingly, it is the Chinese who supply more than three-quarters of world production.
Once again, Joe Biden is following in the footsteps of Donald Trump, who had begun to address the issue. The Pentagon had decided, under his government, to fund MP Materials . This company bought the Mountain Pass mine, north of California's Mojave Desert, which was the world's leading producer of rare earths until the 1980s. The Americans realized their vulnerability when the Chinese threatened to sanction Lockheed Martin. Shares of MP Materials were up 14.5% on Wednesday, but the Biden administration is likely to face environmental concerns from its supporters.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/perche-biden-segue-trump-contro-la-cina-su-terre-rare-e-chip/ on Sat, 27 Feb 2021 06:30:59 +0000.