Australia Disrupts China’s Monopoly on Heavy Rare Earths with Lynas Milestone

Commodity

China–U.S. Trade War

Summary:

Australia’s Lynas Rare Earths has become the world’s first commercial producer of heavy rare earths outside China, marking a critical shift in global supply chains for minerals essential to renewable energy...

Lynas Rare Earths Breaks China's Grip on Strategic Mineral Refining

In a major strategic breakthrough, Lynas Rare Earths—a company headquartered in Australia—announced on May 16 that it had successfully produced commercial quantities of dysprosium oxide at its processing plant in Malaysia. This development marks the first time any producer outside China has achieved this capability at commercial scale, effectively ending Beijing’s complete control over heavy rare earths refinement.

Amanda Lacaze, CEO of Lynas, emphasized that the company’s progress is more than symbolic. By producing dysprosium, a critical component for permanent magnets used in electric vehicles and military applications, Lynas is actively diversifying and de-risking a supply chain that has long been monopolized by China.

The company also expects to begin producing terbium—a similarly strategic heavy rare earth—by June. These rare earths are vital for manufacturing motors, wind turbines, precision weapon systems, and various high-performance electronics.

Australia’s Strategic Stockpile: A New Resource Powerhouse

In parallel with Lynas’ industrial success, the Australian government under Prime Minister Anthony Albanese has committed AUD 1.2 billion to establish a strategic reserve for critical minerals. This stockpile will include rare earths as well as other minerals of national and global importance, such as lithium and cobalt—resources in which Australia already leads in global production.

The reserve is a direct response to geopolitical vulnerabilities exposed by the concentration of mineral processing in China. Despite having significant raw material reserves globally, China accounts for more than 90% of the world's rare earth refining—a dominance that has raised concerns among Western governments and industry leaders, especially amid rising tensions over trade and security.

Rare Earths: Critical to the Future, Difficult to Produce

Rare earth elements (REEs), a group of 17 chemically similar metals, are often labeled as "rare" not due to scarcity but because of the technical and environmental challenges in extracting and refining them. Heavy rare earths such as dysprosium and terbium are even more difficult to separate and process compared to their light rare earth counterparts like neodymium or lanthanum.

These elements are indispensable to a wide range of high-tech applications: dysprosium increases the heat resistance of magnets in EV motors; terbium is key to advanced military radar and sonar systems; samarium is used in guidance systems and space technologies. Their availability is directly linked to the pace of clean energy transition and national defense modernization in countries like the U.S., Japan, and members of the EU.

Geopolitical and Market Implications

Lynas’ announcement reshapes the rare earths market and delivers a critical alternative for nations seeking to reduce dependence on China’s mineral supply chain. In a market where supply concentration translates into geopolitical leverage, Australia is positioning itself not only as a resource supplier but as a processing and technological hub.

This move also comes amid growing efforts by the U.S., EU, and Japan to co-finance rare earth projects outside China. With Lynas now leading by example, further investments in refining capacity across Australia, North America, and Southeast Asia may accelerate.

Meanwhile, market watchers anticipate that prices for non-Chinese heavy rare earths will rise, reflecting both the supply scarcity and the strategic value of secure sourcing.

Australia’s Ascent as a Rare Earth Refining Power

By producing heavy rare earths outside of China, Lynas has achieved a geopolitical milestone that goes beyond commodity markets. It represents a rebalancing of global industrial power—offering democratic nations an alternative path to securing materials vital for the next generation of clean energy and defense technologies.

Australia's growing role, backed by governmental foresight and private-sector capability, could fundamentally shift the structure of global supply chains in one of the most contested domains of the 21st century.

Source: AFP

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Commodity

Aid Disruption Leaves Life-Saving Food Stranded Amid Global Hunger Crisis

Nearly $100 million worth of U.S. emergency food supplies is now sitting idle and deteriorating in global warehouses, according to multiple sources including former officials from the U.S. Agency for International Development (USAID). The disruption stems from sweeping aid cuts enacted by the Trump administration in January 2025, which halted deliveries and suspended contracts, even as global hunger levels reached crisis proportions.

According to inventory records, approximately 66,000 tons of ready-to-deploy food, including fortified cereals, high-energy biscuits, and therapeutic peanut pastes such as Plumpy’Nut, remain locked in storage facilities in Djibouti, South Africa, Dubai, and Houston. These supplies were originally destined for countries like Gaza and Sudan, where millions face starvation.

The volume of stockpiled food could sustain over 3.5 million people for a month. But unless urgent measures are taken before July—when some of the products expire—much of it will be incinerated, repurposed for livestock feed, or disposed of by other means.

Policy Shift Reverses Decades of U.S. Humanitarian Leadership

The decision to scale back USAID’s global humanitarian footprint marks a sharp departure from longstanding American policy. In 2024, the U.S. contributed $61 billion to foreign aid—38% of all tracked by the UN—with more than half administered via USAID. However, under the new administration, USAID has been earmarked for closure by September 2025, with mass layoffs and frozen budgets already underway.

This shift comes amid a surge in global food insecurity. The World Food Programme (WFP) estimates 343 million people are facing acute hunger globally, including 1.9 million on the brink of famine, particularly in Gaza, Sudan, South Sudan, Haiti, and Mali. In Sudan alone, over half the population (25 million people) is currently experiencing food emergencies.

The impact of aid disruption is already being felt on the ground. The NGO Action Against Hunger reported the deaths of at least six children in the Democratic Republic of Congo in April, after it was forced to shut down treatment centers due to halted U.S. funding.

Food Supplies Degrade While Approval Stalls

Despite temporary exemptions for aid to Gaza and Sudan, logistical bottlenecks and bureaucratic delays have prevented the release of stockpiled food. Nearly 500 tons of high-energy biscuits stored in Dubai are set to expire in July. These alone could have treated over 27,000 severely malnourished children for a month.

One proposal to transfer the food to capable humanitarian agencies is still awaiting approval from the State Department’s Bureau of Foreign Assistance. In the meantime, key USAID contractors, such as Edesia—a major producer of therapeutic food—are storing over 5,000 tons of unused products worth $13 million.

Navyn Salem, founder of Edesia, warned that their stocks, meant to save over 480,000 children, may be wasted unless urgent decisions are made. “These products don’t belong in a warehouse. They belong in the hands of starving children,” she said.

Systemic Breakdown Puts Millions at Risk

The consequences of delayed distribution are severe. UNICEF warned in March that 2.4 million children across 17 countries may lose access to RUTF (Ready-to-Use Therapeutic Food) this year due to funding gaps. Jeanette Bailey from the International Rescue Committee confirmed that without continuity in nutritional programs, mortality risk spikes dramatically, with over 60% of untreated severely malnourished children expected to die quickly.

USAID’s four warehouses are integral to global crisis response. Under normal operations, these facilities enable rapid deployment to conflict zones and disaster areas. Without them, organizations lack both the resources and logistical capacity to respond to famines in places like Sudan or Haiti.

From Global Leadership to Humanitarian Paralysis

The U.S., long considered the cornerstone of international humanitarian response, now finds its aid infrastructure unraveling just as the world faces unprecedented levels of food insecurity. As tens of thousands of tons of food rot in warehouses, the gap between available resources and those in urgent need grows increasingly tragic.

Unless decisive action is taken—both to preserve and deploy existing food stocks—the cost will not only be financial, but measured in the lives of the most vulnerable. The crisis unfolding today risks becoming a historic failure of leadership, with implications that may reverberate far beyond 2025.

Source: CNA

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Economic

Thailand Abandons Flagship Digital Wallet Initiative in Favor of Targeted Stimulus

In response to rising global economic uncertainty and the cascading effects of U.S.-led trade tariffs, the Thai government has announced a major shift in its economic strategy. The widely publicized 10,000-baht digital wallet initiative—once hailed as a hallmark policy of the ruling Pheu Thai party—has been scrapped. Instead, 157 billion baht from emergency reserves and central contingency funds will be reallocated to a new, targeted economic stimulus package.

Deputy Prime Minister and Finance Minister Pichai Chunhavajira confirmed that the decision reflects evolving macroeconomic conditions, including the economic impact of trade protectionism and global manufacturing disruptions. The revised strategy will be presented at the May 19 meeting of Thailand’s Economic Stimulus Policy Committee, chaired by Prime Minister Paetongtarn Shinawatra.

A Strategic Pivot to Economic Sectors at Risk

The new stimulus plan will emphasize two key sectors: tourism and real estate—both viewed as vulnerable to a downturn in international demand and capital flows. As U.S. tariff measures begin to reshape supply chains and trade competitiveness, Thai exports and domestic production are expected to come under pressure from both weakening foreign demand and increased inflows of cheap imports.

In light of these risks, the Thai government aims to reallocate stimulus funding toward initiatives that will support liquidity, incentivize industrial restructuring, and sustain business operations throughout the supply chain. Key measures are expected to include fiscal incentives, liquidity support mechanisms, and targeted investment programs.

Digital Wallet Project Phased Out After Limited Implementation

The digital wallet scheme was originally designed to distribute 10,000 baht (approx. USD 300) to all Thai citizens aged 16 and above—estimated at 50 million people—via a blockchain-based application, limited to use within their registered locality. It was intended to stimulate local economies and digital financial inclusion.

While the first two phases of the program were implemented through cash disbursements to 19.55 million elderly and vulnerable citizens, the third phase—targeted at younger adults using digital currency—never materialized. The plan’s collapse marks a setback for Pheu Thai’s populist agenda but reflects a pragmatic shift in fiscal prioritization.

Global Headwinds Drive Economic Realignment

Thailand’s decision comes as trade friction between the U.S. and China reignites, dragging smaller economies like Thailand into the ripple effects. Tariff increases are expected to dampen export revenue, undermine manufacturing competitiveness, and put additional strain on the baht.

Officials cited economic forecasts for the second half of 2025 as a key concern, with global instability expected to intensify. The government remains committed to achieving GDP growth above 3% in 2025, but officials acknowledge that policy tools must now be repurposed to shield Thailand from external shocks and ensure longer-term stability.

From Populist Stimulus to Structural Intervention

Thailand’s pivot from a universal digital wallet giveaway to a targeted industrial stimulus reflects a broader recalibration of fiscal policy under economic duress. Faced with inflationary risks, global trade fragmentation, and weakening external demand, Bangkok is moving toward a more surgical approach to economic recovery—channeling resources to sectors most exposed to global disruption.

This move underscores a key lesson in contemporary economic governance: in times of global turbulence, resilience often requires prioritization over populism, and flexibility over political symbolism.

Source: Nation Thailand

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China–U.S. Trade War

China Retaliates with Sharp Anti-Dumping Tariffs on Key Technical Plastic

On May 16, China’s Ministry of Commerce finalized a sweeping anti-dumping ruling, imposing punitive tariffs on imports of polyoxymethylene (POM) copolymer—an engineering plastic used as a metal substitute in industries such as automotive, electronics, and medical devices. The tariffs, reaching up to 74.9%, target suppliers from the U.S., the European Union, Japan, and Taiwan, following a one-year investigation initiated in May 2024.

The timing of the announcement is particularly notable. It comes directly on the heels of Washington’s recent tariff hike on Chinese electric vehicles, batteries, and semiconductors—a signal that Beijing is prepared to respond in kind through trade remedies under WTO-allowed frameworks.

Material of Strategic Importance at the Center of Dispute

POM copolymer is widely used for its strength and durability in applications that once relied on metals like copper and zinc. It plays a critical role in high-value manufacturing and is tightly interwoven with global value chains. This makes it a strategic item—not just commercially, but geopolitically.

The Ministry’s final determination affirmed that exporters from the targeted regions engaged in dumping practices that harmed Chinese domestic producers. As a result, different importers are now subject to sharply differentiated duties:

United States: Up to 74.9%, the highest among all regions

European Union: A uniform 34.5%

Japan: General rate of 35.5%, with Asahi Kasei Corp receiving a lower rate of 24.5%

Taiwan: General rate of 32.6%, but Formosa Plastics and Polyplastics Taiwan face reduced tariffs of 4% and 3.8% respectively

Tariff War Truce at Risk Despite Temporary Relief

Earlier this week, Beijing and Washington agreed to a temporary reduction of retaliatory tariffs over a 90-day period. While the move was perceived as a tentative de-escalation, China's imposition of steep anti-dumping duties sends a conflicting message. It highlights that even amid détente, both sides are continuing to hedge against each other’s trade measures through legal retaliatory channels.

Commentary in China’s state-owned Global Times called for extending the current “truce,” but analysts view Beijing’s latest action as an effort to secure leverage or signal dissatisfaction with the limited scope of U.S. concessions.

Structural Frictions Extend Beyond Tariffs

The timing of the anti-dumping decision also coincided with the Asia-Pacific Economic Cooperation (APEC) forum meeting in South Korea, where participants issued a warning about the fragility of the global trade system. The continued exchange of trade actions between the world’s two largest economies threatens to deepen fragmentation and disrupt global supply chains.

China’s targeted use of anti-dumping laws—especially in materials with broad industrial use like POM—may indicate a strategic pivot: countering U.S. tariffs not with broad-based retaliation, but with precise, WTO-compliant economic pressure designed to disrupt sensitive supply inputs.

Tensions Resurface Despite Temporary Trade Pause

While recent dialogue between the U.S. and China hinted at a willingness to defuse tariff escalation, Beijing’s imposition of anti-dumping tariffs on a key industrial material illustrates how fragile and conditional the current truce remains. The high tariffs—especially those aimed at U.S. suppliers—highlight the enduring structural conflict over trade practices, supply chain control, and industrial dominance.

With global trade forums sounding the alarm over increasing systemic risks, both sides now face a choice: build on short-term compromises to stabilize economic ties or escalate through calculated, legalistic trade retaliation. The outcome of this balancing act will be critical for global market stability in the months ahead.

Source: Reuters

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China–U.S. Trade War

South Korea: From Export Surplus to Strategic Production Partnership

Among America’s largest trading partners, South Korea stands out not only for its export volume but also for its ability to realign its trade posture under pressure. Confronted with concerns from Washington over trade imbalances, Seoul has transformed potential friction into deeper cooperation by directly investing in the U.S. economy.

Flagship investments from conglomerates such as Samsung, Hyundai, and LG serve not merely to circumvent tariffs but to establish a physical and strategic presence in key U.S. industries. Samsung’s $17 billion semiconductor plant in Texas, for example, is not only creating jobs but also strengthening domestic chip supply—a sector now viewed by U.S. policymakers as a pillar of national security.

Similarly, Hyundai and LG’s electric vehicle and battery production facilities in Georgia align with U.S. industrial and environmental policy goals, especially under the Inflation Reduction Act. By embedding themselves in the American value chain, Korean firms are demonstrating regulatory compliance and long-term economic contribution, softening U.S. concerns over trade surpluses.

In 2023, South Korea exported $115.3 billion worth of goods to the U.S.—a record high. Yet, rather than being targeted by trade retaliation, Korea’s status as a trusted and embedded partner shields it from criticism, largely because it shares benefits via job creation and supply chain reinforcement.

Mexico: From Assembly Hub to Integrated Industrial Partner

Mexico’s emergence as the U.S.’s largest trading partner in 2023, surpassing China, reflects more than geographic proximity. It underscores Mexico’s policy transformation into a high-value industrial collaborator within North America. With exports to the U.S. reaching $490.2 billion, Mexico has shifted from being a low-cost supplier to a strategic production partner.

This evolution is grounded in infrastructure reform, targeted investment incentives, and the effective use of the USMCA framework. Major U.S. and international firms—such as Tesla, BMW, Foxconn, and Intel—have expanded operations in border states like Nuevo León and Chihuahua, drawn by a supportive policy environment and integrated logistics systems.

Mexico's upgraded export structure now includes mid- and high-tech goods such as EV components, medical devices, and semiconductors. Its trade surplus with the U.S. reached $167 billion in 2023, but this surplus has not strained relations due to its embedded role in shared production networks and regulatory alignment on labor and environmental standards.

According to the Brookings Institution, Mexico’s role has evolved from passive assembly-line support to active industrial co-ownership within the North American framework—a shift that helps insulate it from future tariff threats and cements its place in reconfigured global supply chains.

Germany: Preserving Surplus through Industrial Strength and Onshore Investment

Germany, long a subject of U.S. criticism for its persistent trade surpluses, has managed to maintain its position by leveraging quality manufacturing and strategic onshore investment. Rather than confronting U.S. protectionism head-on, Germany has opted to embed its industry into the American economic landscape.

BMW’s Spartanburg plant in South Carolina exemplifies this approach. With a production capacity of over 410,000 vehicles annually—many of which are exported globally—the facility positions the U.S. as a critical node in BMW’s supply chain. This not only offsets policy risk but also reinforces Germany’s industrial identity in U.S. eyes.

Other firms such as Siemens, BASF, and Bosch have followed suit, expanding in sectors like automation, clean energy, and specialized chemicals—industries that align with U.S. economic priorities. By contributing directly to U.S. manufacturing, German companies create shared value rather than extractive trade dynamics.

At the same time, Germany continues to export high-demand, high-tech goods to the U.S., including precision machinery, pharmaceuticals, and green technologies. In 2023, Germany’s trade surplus with the U.S. stood at approximately $75 billion, yet tensions remain subdued due to its reciprocal economic footprint.

Professor Gabriel Felbermayr of the Kiel Institute summarizes Germany’s approach as one of strategic co-investment. Rather than reducing exports, Germany builds long-term presence in partner markets, transforming surplus trade into shared interest through durable economic integration.

Trade Surpluses Reframed through Strategic Engagement

The experiences of South Korea, Mexico, and Germany demonstrate that sustaining a strong trade relationship with the U.S. amid rising protectionism does not require surrendering export ambitions. Instead, these countries have pursued alternative strategies—through investment, compliance, and industrial integration—that reinforce economic ties without undermining their own growth.

By embedding production, upholding regulatory alignment, and co-owning value chains, these nations have redefined surplus not as a threat, but as a platform for mutual benefit. In a global landscape increasingly shaped by tariffs and supply chain nationalism, such adaptive strategies may serve as a model for navigating economic realignment without sacrificing competitiveness.

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Economic

ECB Approaches Policy Crossroads Amid Diminishing Room to Cut Rates

After initiating a monetary easing cycle in July 2024, the European Central Bank (ECB) has reduced interest rates seven times, bringing the deposit rate down to 2%. As markets anticipate another cut in June, internal disagreements within the ECB are surfacing over whether further reductions are warranted or if it is time to pause and reassess.

Speaking to CNBC, Latvia's central bank governor Martins Kazaks acknowledged that the ECB may be nearing the bottom of its current easing trajectory. While inflation is aligning with the 2% target under the ECB’s base scenario, he warned that external uncertainties—particularly from global trade—could rapidly alter the policy landscape. Although Kazaks left the door open for one or two more cuts, he emphasized a need to monitor the trajectory of global trade negotiations closely before proceeding.

Diverging Views on Inflation and External Risks

French central bank governor Francois Villeroy de Galhau expressed a more dovish stance in an interview with French outlet EBRA. He believes Europe remains insulated from the inflationary effects of U.S. trade protectionism and foresees room for one more rate cut over the summer. According to Villeroy, Trump’s tariff-driven inflation in the U.S. is unlikely to spill over into the eurozone, thus justifying additional monetary support.

In contrast, ECB Executive Board member Isabel Schnabel offered a more cautious—and arguably hawkish—view. Speaking at Stanford University, Schnabel argued that rates are already sufficiently accommodative and that the central bank should maintain its current stance to retain policy flexibility. She warned that while near-term inflation may fall below target due to low energy costs, a strong euro, and subdued demand, medium-term inflation risks are tilted to the upside due to fiscal expansion and global supply disruptions.

Tariffs and Fragmented Supply Chains Complicate Outlook

Schnabel highlighted two key sources of inflationary risk. First is the expected rise in government spending across the eurozone, particularly in Germany where new commitments to defense and infrastructure are expanding the fiscal footprint. Second is the growing threat of trade fragmentation—a byproduct of tariff wars led by the U.S.—which could raise production costs and stoke inflation by disrupting global supply chains.

She also challenged the notion that U.S. tariffs would result in eurozone deflation if the EU refrains from retaliating. Even without direct countermeasures, higher global production costs could be transmitted through international supply networks, neutralizing any deflationary impact of weaker global demand and potentially lifting eurozone inflation.

Markets Price In One More Cut After June

Despite the ongoing debate, market expectations remain anchored around a June rate cut. Futures pricing currently implies a 90% probability that the ECB will lower the deposit rate on June 5, with the rate potentially bottoming at 1.75% before year-end. However, expectations for further easing beyond this point remain subdued, suggesting that investors are preparing for a cautious, data-dependent ECB in the second half of 2025.

The ECB now stands at a critical juncture. While some policymakers argue for continued easing to support demand and reinforce the inflation target, others caution that long-term risks—especially those tied to fiscal stimulus and global trade fragmentation—may soon outweigh the benefits of lower rates.

This divergence reflects the broader challenge facing modern central banks: balancing short-term disinflationary trends with structurally emerging inflation risks in a world of geopolitical shocks, protectionism, and post-pandemic policy shifts. For the ECB, preserving policy flexibility may be the most prudent course—especially as Europe braces for a potentially turbulent global economic phase in 2025.

Source: Euronews

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Commodity

Nearly 90,000 Tons of Strategic Food Reserves Headed to Market

Vietnam's General Department of State Reserves (Cục Dự trữ Nhà nước) has officially initiated the release of a significant volume of national food reserves, totaling close to 90,000 tons. According to Official Letter No. 419/DTNN-TCQLH issued by the department, this release stems from the 2024 rotational sales plan that has not yet been completed and will now be carried over into 2025.

Specifically, the department has authorized its regional branches to organize the auction of 40,000 tons of paddy (harvested and stored in 2022) and over 49,519 tons of rice (stored in 2023). The sales will be conducted through a competitive public auction process, in accordance with the Law on Property Auctions and relevant amendments.

Auction-Based Sale with Pricing Governed by State Guidelines

The sales will be carried out by regional Reserve Units under the standardized procedures set out by Vietnam’s Ministry of Finance and the amended Property Auction Law. All transactions will be executed transparently through public bidding to ensure market fairness and alignment with national fiscal policy.

Regarding price setting, the regional Reserve Units must apply the comparative pricing method specified in Section 3, Chapter II of Circular No. 45/2024/TT-BTC. This circular outlines Vietnam’s general valuation framework for goods and services priced by the state. The starting prices determined from these evaluations must be submitted for final approval by the Director of the General Department of State Reserves.

Compliance Timeline and Documentation Requirements

To ensure procedural rigor and coordination, the General Department has mandated that all regional offices finalize and submit the complete dossiers—detailing the proposed starting prices and valuation justifications—no later than May 26, 2025. These documents must comply with the guidelines laid out in Circular No. 25/2025/TT-BTC and amendments to Circular No. 89/2015/TT-BTC governing national reserve goods management.

The rotational sale mechanism is designed to maintain the freshness and quality of national reserves while also contributing to market stability. The sale not only ensures effective stock turnover but can also serve as a policy tool to stabilize food prices in times of volatility or surplus.

This move reinforces the dual role of the State Reserve system: safeguarding national food security and serving as an economic buffer during disruptions. It also demonstrates institutional transparency and a commitment to market-based mechanisms in the management of public resources.

The auction of nearly 90,000 tons of state-held rice and paddy signals Vietnam’s continued efforts to optimize its reserve management system. By extending the 2024 rotational plan into 2025, the government is both preserving the functional quality of its food reserves and enhancing economic efficiency. Through structured public auctions and regulated pricing, the State Reserve system is fulfilling its mandate to balance market needs with national security objectives.

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