Trade tensions between the United States and China have intensified after China imposed restrictions on the export of rare-earth minerals, prompting a strong response from the U.S. government. The move has led to a surge in shares of critical-mineral companies, with Critical Metals rising 27% in premarket trading, following a 55% gain on Monday.
Background
The escalating trade tensions come after comments from former U.S. President Donald Trump over the weekend briefly eased fears of a revived trade war with China. However, Trump’s threat of 100% tariffs on Friday, in response to China’s export restrictions, has reignited the trade tensions.
Impact on Critical-Mineral Companies
The restrictions imposed by China have led to significant gains for critical-mineral companies, including ¹:
– Critical Metals: Up 27% in premarket trading, following a 55% gain on Monday
– United States Antimony: Gained 14%
– Energy Fuels: Rose 11%
– USA Rare Earth: Up 9%
– MP Materials: Edged up 3.7%
China’s Move
China’s restrictions on rare-earth mineral exports are seen as a retaliatory measure against the U.S. government’s policies. Beijing has also effectively banned Chinese companies from doing business with U.S. subsidiaries of a South Korean shipbuilding giant, citing support for the U.S. government and harm to Chinese firms’ interests.
The trade tensions between the two nations are expected to continue, with potential implications for the global economy. As the situation develops, businesses and investors are advised to stay informed and adapt to changing market conditions.