China Cuts Rare Earth Export Quotas

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China announced Tuesday it will cut its export quotas for rare earth minerals by more than 11% in the first six months of 2011.

China produces nearly 97% of rare earth minerals, used worldwide in high-tech products, clean energy and other products that use the minerals’ special properties, like magnetism and luminescence.

In 2010, China slashed the export quota by 40%.

The decision to cut export quotas and raise tariffs on rare earth minerals has put a strain on trade ties with the U.S., the EU and Japan.

The U.S. has threatened to complain to the World Trade Organization, which judges international trade disputes.

China says its decision is for environmental reasons and to guarantee supplies to domestic industrial consumers. But the country has also insisted its dominance as a producer should give it more control over global prices.

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