Trade Fight Flares on China Minerals

China's state media warned on Tuesday that U.S. plans to push a case involving rare earths before the World Trade Organization could trigger a backlash and hurt ties. China's state-run Xinhua news agency on Tuesday said in a commentary that Beijing will defend the nation's rare-earth industry, which involves the mining and processing of key minerals used in everything from consumer gadgets to electric cars to defense systems. "It is rash and unfair for the United States to put forward a lawsuit against China before the WTO, which may hurt economic relations between the world's largest and second-largest economies," it said. "In face of such unreasonable and unfair charges, China will make no hesitation in defending its legitimate rights in trade disputes." A spokesman for China's Foreign Ministry was more reserved, saying at a daily briefing that the U.S. allegations were "groundless" and reiterating that its export restrictions on rare earths were aimed that making the industry more environmentally sound and economically sustainable. The Obama administration Tuesday intends to escalate its trade offensive against China, a move heavy with political overtones, by pressing the World Trade Organization to force the export giant to ease its stranglehold on rare-earth minerals critical to high-tech manufacturing. The announcement, which will be made by President Barack Obama, marks a new front in the administration's election-year effort to turn up the heat on China, amid competition from the president's potential Republican rivals on the matter. It could also pressure China to respond to the WTO on an issue that is of high importance to a range of manufacturers...more