Friend-shoring critical raw materials

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Friend-shoring part 1: Scramble for critical minerals | Friend-shoring part 2: Mexico-US trade relations | Electric vehicles trade | US dollar dominance | WTO trade resources | More research from Hinrich Foundation

Friend-shoring part 1: Scramble for critical minerals

It’s time to take stock of the scramble for critical raw materials, say Simon J. Evenett and Johannes Fritz in CEPR Press. Zeyi Yang breaks down China’s restrictions on critical minerals for semiconductors for the MIT Technology Review. What critical minerals could the US and its partners produce? Bentley Allan, Noah Gordon, and Cathy Wang make projections for the Carnegie Endowment for International Peace. Can the world secure critical minerals for clean energy without alienating China? asks Zongyuan Zoe Liu for the Council on Foreign Relations. Cullen S. Hendrix explains why the EU proposal for a critical minerals buyers’ club is a bad idea, for the Peterson Institute for International Economics. 

Mentioned publications

1. The Scramble for Critical Raw Materials: Time to Take Stock? The 31st Global Trade Alert Report – Simon J. Evenett and Johannes Fritz, CEPR Press, 2023
   How urgent is the need to scramble for critical raw materials resources?  

2. China just fought back in the semiconductor exports war. Here’s what you need to know. – Zeyi Yang, MIT Technology Review, June 10, 2023
   What do China’s restrictions on gallium and germanium exports mean for technology trade?  

3. Friendshoring Critical Minerals: What Could the U.S. and Its Partners Produce? – B Bentley Allan,  Noah Gordon,  Cathy Wang, Carnegie Endowment for International Peace, May 3, 2023
   An analysis of what the US and its allies can produce and what amounts are needed by 2030. 

4. How to Secure Critical Minerals for Clean Energy Without Alienating China – Zongyuan Zoe Liu, Council on Foreign Relations, May 25, 2023
   Can the US and its allies secure supply chains while maintaining China’s buy-in towards a clean energy transition?  

5. Why the proposed Brussels buyers’ club to procure critical minerals is a bad idea – Cullen S. Hendrix, Peterson Institute for International Economics, May 4, 2023
   The EU’s proposed buyers’ club may hurt more than help.

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Friend-shoring part 2: Mexico-US trade relations

Mexico is a natural location for reshoring production from Asia, but how secure is the relationship between the two neighbors? Mexico became the US’s top trading partner this year, according to Luis Torres and the Federal Reserve Bank of Dallas, while Mexico’s booming exports provide evidence of nearshoring, per Bloomberg. Adam Tooze explains why the US-Mexico relationship is more fraught than the numbers indicate, in Chartbook. 

Mentioned publications

1. Mexico seeks to solidify rank as top U.S. trade partner, push further past China – Luis Torres, Federal Reserve Bank of Dallas, July 11, 2023
   Mexico became the US’ top trading partner for the first time this year. 

2. Mexico’s Booming Exports Provide More Evidence of Nearshoring – Leda Alvim, Bloomberg, June 23, 2023
   Trade data supports evidence of nearshoring to Mexico as Mexican manufacturing exports boom. 

3. Chartbook 218: "So far from god" ... friend-shoring and the debate in Washington over whether to bomb Mexico – Adam Tooze, Chartbook, June 3, 2023
   Mexico is a natural location for friend-shoring, but how stable are US-Mexico relations?

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Electric vehicles trade

How have China’s industrial policy successes and American industrial policy failures influenced the evolution of trade in electric vehicles? The New York Times dives deep into the centrality of China in EV battery supply chains, while Bloomberg explores America’s long, tortured journey to build EV batteries, while the Wire China explains the reasons behind and future prospects for China’s BYD electric vehicle company. 

Mentioned publications

1. Can the World Make an Electric Car Battery Without China? – Agnes Chang and Keith Bradsher, The New York Times, May 16, 2023
   A visual depiction of how China controls the EV battery supply chain and the durability of China’s role. 

2. America’s Long, Tortured Journey to Build EV Batteries – Gabriella Coppola, Bloomberg, June 8, 2023
   How the US fell behind China on developing EV Batteries, and what it could take to regain its edge.

3. BYD’s Big Moment – Eliot Chen, The Wire China, June 18, 2023
   In only three years, BYD has become a major global player in electric vehicles. 

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US dollar dominance

Though some economies are looking to lessen reliance on the US dollar, the dollar is expected to remain dominant for at least the next decade, explains the Financial Times.  Is that a good thing for the US economy? Michael Pettis describes the high price of dollar dominance for Foreign Affairs. 

Mentioned publications

1. US dollar to maintain dominance over next decade, say central banks – Mary McDougall, Financial Times, June 27, 2023
   Reserve banks expect the US dollar to continue to constitute a majority of global reserves in ten years. 

2. The High Price of Dollar Dominance – Michael Pettis, Foreign Affairs, June 30, 2023
   What is the cost of US dollar dominance to the US economy?  

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WTO trade resources

Look no further than the WTO’s annual tariff profiles report for details of the application of tariffs in global trade. 

Mentioned publications

1. World Tariff Profiles 2023 – World Trade Organization, International Trade Centre, and United Nations Conference on Trade and Development, July 6, 2023
   An annual report with comprehensive information on tariffs imposed on imports by over 170 economies. 

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Mentioned publications from HF:

• Friend-shoring critical mineral supply chains
• Critical minerals trade and the green energy transition 
• The geopolitics of climate change and cleantech 

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