People, raw material and energy, the trade war with China, and will tariffs solve anything?

We are in a pickle. At least we were until President Trump stirred the pot and decided to address the trade war with China that has been going on for more than a decade, encouraged and abetted by former President Obama and his religious belief that the biggest threat to civilization is not nuclear holocaust, chemical poisoning of people and the earth or super-volcanoes, earthquakes, tsunamis and other natural phenomena, but climate change, all man-made of course.

Let us compare the economies of China and the U.S. in raw numbers.

1. Concrete. China produced 51.4% of the world’s cement in 2015, USA produced 1.8%. China’s production was almost 30 times larger.

It takes a lot of concrete to build artificial islands so they can take control of the South China Sea.

2 Steel production. China produced 50.3% of the world’s crude Steel in 2015, USA produced 4.9%. China’s production was over 20 times larger. Some of this steel was dumped below production cost to crush our domestic low end steel industry. An example: Rolled steel to make steel cans were exported at about $200 a ton, the production cost in the U.S. is more like $400 a ton.

3. Aluminum (or Aluminium as the British and IUPAC call it) China produced 41% of the world’s raw aluminum in 2010, USA produced 4.5%. China’s production was nearly 10 times larger.

This is easily rectified. Aluminum is produced where electricity is abundant and cheap, like in Norway and Iceland. Aluminum is produced whenever there is excess electric capacity, never on peak hours. Even here China dumps their excess Aluminum.

4. Coal. China burned 51.2% of the world’s coal in 2012, USA produced 12.5%. China’s production was more than four times larger.

This of course with the Paris accord in mind. U.S. and the European countries are to limit their emissions and slowly diminish them, down to a per capita emission comparable to the mid 1800’s, while China, being a developing country is allowed to increase their emissions until 2030, and then stabilize them, not decrease them.

If this seems like we have already sold out to China, it is nothing compared to

5. Rare Earth Metals. First, rare earth metals re not rare at all, they exist in small quantities together with Thorium and sometimes Uranium wherever other metals are mined.

The Lanthanides occur in quantity in Monazite, a byproduct of mining Phosphates, but also as a byproduct of mining Titanium, and even from some Iron ores. The rare earth metals are free to begin extraction if it was not for one thing, they also contain Thorium, and Thorium is radio-active, so in the mid 1980’s the NRC and IAEA reclassified Monazite and anything containing Thorium as a “Source Material” and after that it became too costly to comply with all the regulations for nuclear material, so all production of rare earth minerals ceased in the U.S.

China saw an opportunity to grab the world market for Rare Earth Metals and is now controlling about 94% of the supply of all rare earth metals.

So what are rare earth metals used for?

China now has a de facto monopoly on all usages of rare earth metals, and in the case of war or an embargo, not only are our precious cell phones and computers in jeopardy, so is our defense, night vision goggles, aircraft engines, navigation systems, laser guidance, just to name a few uses.

And not only that, we import the completed parts from China, even for our most sophisticated military equipment, such as the F35 aircraft, after telling the Chinese how to make the components. The very same components are now in China’s version of the F35, still under development, but in a year or so China will have their faithful copies made!

This is clearly unsustainable, so in 2014  Congress tried to pass HR 4883 and         S 2006 to remedy the situation, but the bills got killed in review by none other than the defense department, citing National Security!

We are no longer under the Obama “Strategic Patience” doctrine, so an updated version of these bills need to be introduced ASAP, or we will be on the hook from China forever!

After all this, the current spat with North Korea seems like a nuisance.

 

Published by

lenbilen

Engineer, graduated from Chalmers Technical University a long time ago with a degree in Technical Physics. Career in Aerospace, Analytical Chemistry, and chip manufacturing. Presently adjunct faculty at PSU, teaching one course in Computer Engineering, the Capstone Course.

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