Washington
Beijing Calls Washington’s Bluff on Strategic Metals
January 2, 2025
China’s latest export restriction lays bare the complex geopolitics behind President Trump’s proposed tariffs—and the green energy transition.
Earlier this December, the Chinese government announced that it would curb the export of several key industrial minerals, as well as certain types of graphite. The move came in the context of mounting pressure on China from Washington, and in anticipation of stringent tariffs that Donald J. Trump has promised to levy when he returns to the presidency next year.
Chinese government spokespeople have argued that curbing export of these minerals is in line with their government’s antiproliferation efforts. They have said that the materials are “dual use,” and that they might be used in manufacturing weapons. Officials in the United States have historically also argued the same thing about some of the minerals, such as graphite, which the US put under strict export controls in 2006.
Among the minerals are antimony (which is used in night-vision goggles and bullets), gallium (precision-guided weapons and radar systems), and germanium (powerful sensors that are mounted on tanks, ships and helicopters). Superhard metals like tungsten may also be included in the restrictions, as is graphite, a type of carbon familiar from its use in pencils. Certain types of graphite are used in gun barrels, and others are dispersed on the battlefield as a sort of smoke that confuses electromagnetic wave detection devices.
Most of these materials also have considerable civilian uses. For instance, graphite is used in the anodes, or negative electrodes, of almost all lithium-ion batteries. (If you’re reading this article on a battery-powered device, you’re probably using graphite in some form.) What export controls mean is that non-Chinese companies that use the material in products destined for the United States will have to apply for export licenses. Such licenses will be up to Chinese officials to grant or withhold.
China controls the vast majority of the processing of some of these materials—a fact that began to register widely in Washington only as tensions began to ramp up with China during the previous Trump administration. China, for instance, produces 61 percent of natural graphite and 98 percent of the world’s final processed graphite. Graphite is also a key material in the green energy transition and electric vehicles: Last year, some 50 percent of the world’s natural graphite went into electric vehicles.
Beijing has managed to extend its grip across the supply chain in recent years. Efforts have been made—most notably through Joe Biden’s Inflation Reduction Act—to create a supply chain for critical minerals that is independent of China, as well as the development of new technology that reduces the need for hard-to-get materials. But progress has been slow. “China is still set to be the dominant player,” said Tony Alderson, the senior anode and cathode analyst at Benchmark Mineral Intelligence, a specialist provider of supply chain and energy transition information. “I think the investment that they are putting in is huge, and it is more than the US with regard to the anode supply chain.” Despite paeans to progress from politicians in Europe and the US, 2024, he said, was “the year of delays,” and a widening gap between supply and demand for critical minerals in everywhere but China.
Current Issue
By banning the export of these minerals, the Chinese government is showing that it has leverage over critical parts of the supply chain for electronics. “We see it in the industry as a shot across the bow,” Michael R. Hollomon II, the commercial director at US Strategic Metals, a mining and processing firm focused on green transition materials, told me. He noted that the Chinese have enacted similar bans of critical minerals in the past, including a ban last year of specific gallium and germanium products. “The Chinese government have put their money where their mouth is.”
Markets have reacted to the news of the most recent reductions: The price of antimony surged 40 percent on news of China’s most recent export curbs. It was something that worried Gary Evans, the CEO of US Antimony Corporation, the only domestic processor of antimony. Evans, speaking on Fox Business, worried that high prices would cause businesses to be priced out of the market.
Hollomon said that the Biden administration had often talked about building a supply chain independent from China, but that promised projects were often not followed through on, and that funding was held up at critical stages. China, on the other hand, has been able to fund projects and drive down costs for Chinese firms through massive injections of state capital into the mining, processing and industrial use of critical metals and transition technology. “We’ve been playing with our hands tied behind our backs—that is the way the West has been operating for the last 15 years,” he said.
But there is a more fundamental question at play as well. The United States traditionally limited technology transfers to China because of copyright concerns: This year, President Biden imposed an 100 percent tariff on Chinese electric vehicles. The US government recently prepared restrictions on the import of AI technology into China (Beijing responded with an antitrust investigation into the US chip giant Nvidia), and Washington has been talking about “decoupling” from China for the last several years. In 2022, the US Department of Defense even released a 74-page report on “securing” the supply chain for materials used in military hardware. Chinese graphite is already subject to a 25 percent tariff in the US. (Last Wednesday, a North American trade association of active anode material producers asserted that such a tariff was “far too low” and asked the US government to levy a 920 percent tariff on Chinese graphite imports, a move that would double the cost of an electric vehicle Stateside.) Why would China help the United States build a supply chain that subverts its own interests and diminishes market share for Chinese companies?
In the critical metals and renewable energy space, there is growing apprehension over the use of tariffs in a part of the world economy in which China has become king. “To me,” Trump has said, “the most beautiful word in the dictionary is ‘tariff.’” He has even suggested he would impose tariffs of up to 60 percent on Chinese goods. But while Washington seems to think of tariffs as a one-way street, China’s most recent show of force shows that Beijing has considerable leverage, especially when it comes to materials that are used in electric devices and vehicles.
In the end of the day, costs from tariffs usually get passed on to the consumer. Trump, who used fears of inflation to galvanize his base during the last election, will be wary of policies that cause too many shifts in prices. Antimony, after all, is not just in bullets; it is used as a flame retardant in roofing across the US.
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Perhaps rising costs will mean the next administration will be more amenable to striking a deal with China’s premier, Xi Jinping, an autocratic leader Trump reportedly admires. Elon Musk’s ties to China—around a half of Teslas are produced there, and the country is said to be the world’s second-largest market for the electric cars—might also complicate things. But that won’t solve the pressing issue of China’s domination of the supply chain for critical raw materials.
Industry players like Hollomon believe the incoming administration has the chance to spur domestic mining and processing through grants and streamlining regulations and building up the nation’s strategic reserve of minerals, many of which were sold off after the Cold War. But the outlook is also worrisome: increased tariffs have historically lead to retrenchment and stockpiling, which have tended to be ingredients in conflict. Even if such fears remain distant for now, a China in which the materials processing and battery industries are two bright spots in an otherwise bleak economic landscape is not likely to cede its primacy in those spaces any time soon.
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Washington
Shooting during ICE operation in Maryland leaves 2 injured, officials say
Federal immigration agents shot at a moving vehicle on Wednesday morning during an enforcement and removal action in Glen Burnie, Maryland, striking one person and injuring another, officials said.
A spokesperson for the Anne Arundel County Police Department said neither person had life-threatening injuries, and both were taken to the hospital.
Anne Arundel police responded to a report of a shooting involving federal agents at about 10:50 a.m. The Immigration and Customs Enforcement agents were the only officials involved in the shooting, police said.
Preliminarily, police said the agents approached a white van, but the vehicle attempted to run them over. The agents fired at the van, which accelerated until coming to a stop in a wooded area, police said.
When asked for comment, Department of Homeland Security officials said both civilians involved in the altercation with ICE are in the U.S. illegally. They did not indicate whether either of the men had been arrested.
“Continued efforts to encourage illegal aliens and violent agitators to actively resist ICE will only lead to more violent incidents,” Assistant Secretary Tricia McLaughlin said in a statement.
Anne Arundel police said they will investigate the shooting, while the FBI investigates the alleged assault on the agents and ICE conducts an internal investigation.
Washington
Millionaire tax plans spread as Washington state eyes new levy | Fortune
When Washington Governor Bob Ferguson proposed the state’s first income tax in modern history, he said the word “affordability” five times.
Ferguson on Tuesday asked the legislature to craft a 9.9% tax on personal income over $1 million, which would revolutionize a state revenue system heavily reliant on sales and property tax. Although his fellow Democrats have for decades failed to push through an income tax, Ferguson said it’s “a different time right now.”
“We are facing an affordability crisis,” Ferguson said. “It is time to change our state’s outdated, upside-down tax system. To serve the needs of Washingtonians today, to make our taxes the more fair, millionaires should contribute toward our shared prosperity.”
Democrats across the US are increasingly exploring taxes as a way to capture the populist moment and address the country’s widening wealth gap. If “affordability” was the issue highlighted by Democrats who outperformed expectations in the off-year elections of 2025, the slogan next year could very well be “tax the rich.”
It’s an opening Democrats see as the Trump administration this year paired tax cuts for high earners with reductions in Medicaid and supplemental food assistance. Raising taxes on the wealthy could also help solve a fiscal problem for states dedicating more resources to plug the holes from federal cuts.
“We have a federal government that has gone into super-villain mode, seeming to deliberately take from the poor and middle class to give to the rich,” said Darien Shanske, a tax professor at UC Davis School of Law. “This unnecessary emergency is laying down a gauntlet for states: Will they let this suffering come to pass and, if not, how will they pay for the triage? Taxes on the best-off are not just fair but also efficient.”
Read more: Millionaire Tax That Mamdani Loves Fuels a $5.7 Billion Haul
Progressive tax advocates often point to Massachusetts’ 4% surtax on incomes over $1 million, which brought in roughly $5.7 billion in fiscal 2025, far exceeding revenue projections in its third year of collection.
New York Mayor-elect Zohran Mamdani campaigned on raising the city’s income tax on millionaires by 2 percentage points to 5.9%, which critics said would lead to an exodus of wealthy people.
Colorado voters this year approved a measure to limit deductions for taxpayers earning at least $300,000. The revenue will fund a program providing free meals for all public school students. Colorado officials also advanced a ballot measure to change the state’s 4.41% flat rate to a graduated income tax, potentially raising more than $4 billion. That will likely go before voters in 2026.
Michigan residents could also face a ballot initiative next year to change the state’s flat 4.25% tax rate to add a 5% surcharge on individuals earning more than $500,000 and couples making more than $1 million.
Romney’s Call
Even 2012 Republican Presidential candidate Mitt Romney has joined the call. Last week, the former US senator from Utah penned an essay in the New York Times calling for rich people to pay more, mostly in the form of closing loopholes the wealthy use to minimize tax obligations.
“It would help us avoid the cliff ahead,” Romney said, pointing to government funding shortfalls, “and might tend to quiet some of the anger that will surely grow as unemployed college graduates see tax-advantaged multibillionaires sailing 300-foot yachts.”
Most of the populist proposals coming from the states would raise taxes on income. But the tricky thing about some wealth is that it doesn’t come from a paycheck and thus is harder to tax. Even a levy on capital gains depends on a taxpayer selling assets to realize that increased value.
For example, former Microsoft Chief Executive Officer Steve Ballmer’s net worth increased by $706.5 billion on Monday, according to the Bloomberg Billionaires Index. Even though his mansion sits across the lake from downtown Seattle, those gains wouldn’t be subject to an income tax.
That’s why some Washington state Democrats are still pushing for the US’s first wealth tax on unrealized gains. Under a proposal passed by the state Senate last year, portfolios of some publicly traded asset classes worth at least $50 million would be taxed at 0.5%.
Ferguson panned the wealth tax proposal last year, saying it would be irresponsible to balance the budget on a measure that would certainly face legal challenges.
One of the most common warnings from tax opponents is that once legislators have a new tax mechanism, they’ll either increase the rate or lower the threshold at which it would apply. Ferguson in his income-tax proposal nodded to that concern, saying the $1 million level should increase with inflation and be included in the statute or perhaps even a constitutional amendment.
Read More: Vegas Lures Millionaires Fleeing Wealth Tax in Washington State
State taxes are also easier to avoid than federal taxes, because it’s relatively easy to move a primary residency. Washington used to attract taxpayers fed up with California’s high rates, but that has changed since the Evergreen State started taxing capital gains. Next year could be the year of the millionaire’s tax — in Washington state and across the US.
Washington
Windstorm to hit western Washington on Christmas Eve with gusts up to 70 mph
WASHINGTON STATE — All is calm, all is bright for Christmas Eve-eve…not so much for Christmas Eve itself.
An unusual windstorm will slingshot up the west coast, making for a windy Wednesday in western Washington as we head into the holiday. A pre-emptive HIGH WIND WATCH has been issued by the National Weather Service to account for strong and potentially damaging easterly and then southerly winds, but I expect that to turn over to a HIGH WIND WARNING as we get closer and these gusts look imminent.
ALSO SEE: Mountain snow, gusty winds and heavy showers expected for Christmas Eve
In the short-term, things are quiet enough for now. Mainly cloudy skies will tuck us in, but because the air mass is still seasonably chilly, we’ll drop back into the 30s by dawn. The passes are very passable, but could be icy as lows plunge into the 20s overnight.
On Wednesday, things get interesting quickly. Storms don’t usually move from California right up the coast to Washington, but there has been nothing usual about this December so far, and that’s exactly the odd track this system is going to take on its way into the region.
Remember that lows act like giant vacuums in the sky, pulling air into them as they go by. This is a roughly 980 millibar low on approach–plenty deep enough to suck in air noticeably as it passes.
This howling wind-maker will work its way up toward the Washington coast by Wednesday morning. With its center still over the Pacific, the winds will be easterly.
The ocean beach communities and the foothills of the Cascades (Enumclaw, Issaquah, North Bend, and Monroe) will be subject to these easterly blows, gusting 30 to 50 mph for the first half of the day there. Why not in Seattle? The 8,000′ tall Olympics will initially act as an offensive lineman for the waterfront locations near the Sound, blocking the bulk of the windy weather before the lunch hour.
However, this low will hightail it over Neah Bay, eventually curling in over Vancouver Island by the afternoon. Now, without the shield of the Olympics between Seattle and the storm center, we’ll be subject to strong southerly (remember the wind follows the low’s movement and track, so the direction will change) gusts of 30 to 50 mph over the Sound, including in Tacoma, Olympia, Everett, and the Emerald City.
These strong winds may be enough to give us some tree damage and knock down power lines…not what we want to see on Christmas Eve! A grand finale burst of southerlies of 40 to 60 mph or more (some models suggest gusts to 70 mph) will close down the evening in Port Townsend, Oak Harbor, Friday Harbor, and Ferndale–those of you closer to British Columbia will be subject to the strongest winds right after sunset.
By the time people are heading out to the midnight mass, the windstorm should be a wrap, but it will be a dicey day beforehand. Not only will it deal with the wind, but also rain in the lowlands and bursts of heavy, blowing snow over the Cascade passes. Highs will bump up a bit, ending up closer to 50 in the metro area.
Christmas Day itself should be far easier for travelers and celebrations, with lighter rain at times and temperatures back in the more typical middle 40s. This will keep occasional snow falling over the mountains to about 3,000′ (Snoqualmie Summit level) as well.
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