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US-China Tariff Trade War - What We Know

A trade war between the world’s two largest economies exploded this year - with the threat that China may restrict the flow of rare earth metals looming over the US.

And with rising tensions between the two countries, we spoke with our Technical Director, Mark Sweatman, to get the latest information on Neo based products:

“Our Neo supplier is one of the largest in China – We have a positive, longstanding relationship with them.

“We’ve recently spoken with management to discuss what their other customers are doing to mitigate the potential risk of tariff issues. They have explained that their clientele is not taking any action.

“Based on our excellent relationship, we know that if there was an obvious solution - they would have proposed it.”

Amid rising tensions between the countries - it’s difficult to forecast what will happen and how it will play out.

It is critical to remember that all Neo products flow from China - so everyone is in the same boat. There is no alternative source or option, even your competitor won’t have another country of origin.

It’s also thought that trying to send products via other countries is likely to be unsuccessful, because any product containing Neo will originate from China and customs will be aware of this.

There is the option of buying ahead, but then you are tying up capital and dealing with inventory cost for the short time that this could be applied.

Mark concluded: “Unfortunately, non-rare earth magnets cannot be substituted due to lower strength. Your team may have a different view, but we’ve yet to find credible counter-solution.

Over the years, rare-earth prices have remained reasonably stable. There have been times when prices have fluctuated due to supply and demand issues - similarly to oil prices fluctuating when suppliers constrict supply. But in the end, these have not lasted long and the prices drift back to normal.”

If you have questions with regard to trade tariffs, TyTek will do whatever we can to assist you.