China’s dominance in rare earths makes U.S. supply chains vulnerable, U.S. Trade Representative Katherine Tai said in an exclusive interview Saturday with CNBC’s Martin Soong.
Rare earth metals are used in high-tech products such as electric car motors. Over the decades, China has built up its ability to process the metals — giving it enormous pricing power in a critical global market.
“What I want to draw your attention to is not just the vulnerabilities around China’s investments [overseas], but the fact that China’s dominant position in the world market now in [rare earths] means that it is able to turn on the faucet and turn off the faucet,” Tai said.
“The stars really are aligning between the United States and India and that’s across all of the policy areas,” Tai told CNBC. She described the relationship as “experiencing new heights.”
She said in her area of economics and trade, the potential for working more with India was always there, but previously, “we just couldn’t figure out how to tap it.”