The ongoing trade war between China and America is now taking a horrific turn. America seems to be getting trapped in the trap that China started in this war. In fact, Ford Motor Company had to close some of its factories in America in the last three weeks. The reason for this was the shortage of magnets made from rare earth minerals. These magnets are used in many important parts of vehicles. These rare earth minerals are a big issue in the ongoing trade tension between America and China. Its impact can be seen on India as well.
The company’s CEO Jim Farley said that this situation shows that we will have to create a supply chain in our country to make vehicle parts. China has made a new rule for the export of rare earth. This is causing supply delays. “For the last three weeks we have shut down our factories because we can’t get high-power magnets from China,” Farley said at the Aspen Ideas Festival. Farley said these magnets are vital to car seats, windshield wipers, doors and audio systems. Farley has been open about the company’s difficulties in obtaining these materials.
Even US President Donald Trump had said that an agreement had been reached in talks with China to quickly approve export licenses for rare earths. Despite this, the problem persisted. Rare earths have become a key issue in trade talks between the US and China. These precious raw materials are used in cars, iPhones and other things. China is the largest producer of these and uses them to gain its point in negotiations.