China has broken international trade law by restricting the export of rare earth elements and other metals crucial to modern manufacturing, a World Trade Organization panel said Wednesday. That conclusion opens the possibility that Beijing will face trade sanctions from the United States, which brought the case, and the European Union and Japan.
China produces more than nine-tenths of the global supply of the strategically important metals, which are essential to a host of modern applications including smartphones, wind turbines, industrial catalysts and high-tech magnets. Prices soared in 2010 after Beijing cut export quotas by about 40 percent, to just over 30,000 tons, saying the restrictions were necessary on environmental grounds.
But critics said the quotas gave an unfair advantage to China’s domestic manufacturing industries. Members of the W.T.O. panel considering the case in Geneva agreed with that assessment.
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