Trade War Spawns Magnet Shortage for Carmakers; Tyrannosaurus Rex-Cycled
And more about the human and environmental costs of renewable energy and digital technology—and how we can do better.
Trade War Spawns Magnet Shortage for Carmakers
Western carmakers are starting to freak out as the US-China trade war throttles supplies of rare earth magnets—the core ingredient of electric vehicle motors as well as many components in gas-powered cars. China manufactures almost all of these magnets, and in recent weeks, in response to President Trump’s tariffs, has all but shut off exports to the rest of the world.
“American automakers are the hardest hit, with executives warning that production at factories across the Midwest and South could be cut back in the coming days and weeks,” the New York Times reports. The magnet shortage already forced an American Ford Explorer factory to briefly close in May. Electric and hybrid vehicles are the most dependent on magnets, but the gizmos are used in pretty much all modern vehicles, in windshield wipers, power seats and other moving parts. As a result, “carmakers are … considering stripping out some premium features, such as adjustable seats… High-end speaker systems that use rare-earth magnets could also be replaced with downgraded versions,” according to the Wall Street Journal. Some car and component makers are now considering moving their operations to China to gain access to the magnets. Even Trump’s (former?) buddy Elon Musk has warned Tesla investors that the magnet crunch could delay his efforts to build humanoid robots.
Manufacturers outside the US are also sweating. Several European auto parts plants have shut down production lines after running out of magnets, and executives with Toyota, Volkswagen and Hyundai warned that more stoppages may be coming. Japanese business leaders are meeting with Chinese officials this week about the restrictions, and European diplomats are also seeking emergency confabs in Beijing, according to Reuters. India’s second-biggest maker of two-wheeled electric vehicles—a much bigger market there than the four-wheeled kind—“has warned that China’s export curbs on rare earth magnets could trigger major production cuts and potentially bring India’s electric two-wheeler manufacturing to a grinding halt,” reports the Financial Express.
China manufactures around 90 percent of the world’s rare earth magnets, in addition to dominating the mining and refining of the metals from which they are made. These powerful, heat-resistant magnets are used in a bewildering range of technologies besides cars, including drones, robots, missiles and cell phones. All of which makes them a potent card in Beijing’s hand. In April, two days after Trump slapped huge tariffs on Chinese goods, China suspended all magnet exports and began implementing a new, more restrictive regulatory system. As Adamas Intelligence explains, this gives Beijing the power “to halt supplies to specific companies, industries or regions with surgical precision.” Since then, Chinese authorities have issued a few export permits but nowhere near enough to meet demand.
There are non-China sources for rare earth magnets, but their output is tiny. Japan ekes out about 7 percent of the world’s supply, and Vietnam another 1 percent. That’s about it.
American officials are especially concerned because of the importance of the magnets to military technologies. The Department of Defense has declared it aims to build a complete mine-to-magnet supply chain by 2027. That’s going to be tough. “A lack of commercially viable natural reserves, few engineers trained in the extraction process and limited numbers of companies able to compete at the industry’s thin price margins are just some of the challenges the department faces,” notes Bloomberg.
Part of the problem is simply knowing how to make the things. There are dozens of rare earth chemistry programs in universities across China; the US has none. For good measure, China moved to thwart potential competitors back in 2023 when it banned the export of technology used to make the magnets.
A couple of small factories are slated to start producing rare earth magnets this year in South Carolina and Texas. (One of them is run by MP Materials, America’s only sizable rare earth producer, which I wrote about in Power Metal, the book.) But it’s going to be a very long time before they can replace Chinese supplies, if ever.
It’s all enough to make you think that maybe launching an unprovoked trade war with the world’s biggest manufacturer wasn’t such a great idea after all.
As the traditional media keeps shriveling, newsletters like this one are increasingly important ways for indie journalists like me to keep spreading news that matters. If you find these dispatches interesting and/or useful, or if you just want to keep independent journalism alive in the Age of Oligarchs, please consider becoming a paid subscriber. A basic sub is just $5 a month—less than an artisanal donut, and better for you. Even better: Join as a Founding Member, and get a free signed copy of Power Metal, the book!
Tyrannosaurus Rex-Cycled
I love this dinosaur made entirely out of castoff metal parts, which lives behind Vancouver’s Science Center. Steam-shovel mouth, trash-can neck, shopping-cart stomach and thighs packed with old cell phones! Like the mango tree I wrote about recently, it’s a great example of reuse—the best way to get further utility and/or enjoyment out of already-manufactured products. Reusing stuff is much cleaner and more efficient than melting all that metal down to recycle it, although that too will hopefully happen once this dino goes extinct.
Same goes for this excellent troll made from repurposed pallets and other scrap wood, one of several installed around Seattle by artist Thomas Dambo.
Book News
I’ll be talking about the intersection of critical metal supply chains and digital security at MacDevOpsYVR, a programmer’s confab in Vancouver, on June 13. Meanwhile, thanks to Australia’s Tyson Popplestone for having me on his podcast last week! If I’d known he was gonna post the video I would have worn a nicer shirt…
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