Why did China mention Graphite? So... Why did China mention Graphite?
let's start at the beginning...
1. The USA (Biden Administration) bans the sale of chips (not potato) to China.
2. China responds with a BAN on Gallium, Germanium, and Antimony. All are minerals used in the production of chips...
3. AND.... a strict review of graphite being supplied to foreign buyers.
So heres the multi million dollar question:
if you are China and you are pushing back at being banned from chips, couldn't you have just stopped at banning the 3 minerals and have made your point?
The answer is clearly yes... if that's all you wanted to say. But this response is not just responding to the Biden administration, this is a first punch at the Trump administration and the expectation of things to come.
so, if you want to take a first swing at Trump, why graphite, why not aluminum, steel, nickel, copper, pork, etc....
I suggest to you that graphite was selected because:
1. China controls virtually 100% of the processing of graphite into Anode material. And 90% of the mining/raw materials through their companies and countries they are connected with.
2. EVs can NOT be built without anode. OEMs and Battery manufacturers are affectively 100% dependent on China's supply.
3. China is going to be hit with significant tariffs.
China sees the writing on the wall. If Trump hits his "friends" (Canada/Mexico) with 25% tariffs... what will be the tariffs on China?
Trump threatened Canada with 10% and came out with 25%.
Trump has threatened China with 60%...
Applying the same logic (2.5x) would mean a tariff along the line of 150%...
strangely enough, Marco Rubio (senator, soon to be Secretary of State) put out a bill calling for an immediate tariff of.... you guessed it... 150% to start the party...
these are just guesses of course!
but Mr. Trump has never failed to shock. What he doesn't do is bend or break to the will of others. Last time I checked Trudeau was at Mar-a-lago kissing the ring. No one saw that coming. But here we are.
the question is, what will this coming week or weeks have in store? When will we see that tweet that will send things spinning?
remember antimony... up 240%... and china only controls 40% of that mineral...
do your own DD... I'm still looking for a buyer for my dog.