The type and scope of recent US tariffs on Chinese semi-conductors and electric vehicles presage a trade war that will intensify as the AI boom progresses from its genesis. The looming decisions for US trade policymakers focusing on China should trigger a change in Biden’s foreign policy with Asia.

Triangular diplomacy is a political science doctrine that explains the coordinated action between two states (sender countries) that aims to limit the influence of another country (target country).1 Triangular diplomacy can be executed in different ways. This is one of them.

It was first manifested during the Cold War when the US normalized relations with China in order to check the power of the USSR. In today’s geopolitical economy focused (in part) on Artificial Intelligence, the US would be well-advised to execute this strategy again. This time, however, China should be the target country and S. Korea will be the country with which the US collaborates.

The above-referenced tariffs are a direct response to the Chinese government’s support of BYD- the Sino-manufacturer that has recently overtaken Tesla
as the world’s leading EV brand. Subsidies from the Chinese government and its unfettered access to vast amounts of lithium refined in China have empowered BYD to offer lower price points that are more affordable than Tesla for the average consumer. While Tesla also benefits from financial support from the US government, it does not receive the level of support that Chinese officials provided BYD.

In spite of conflicting political ideologies and competition between the US and China, their economic interdependence has enabled decades of complicated cooperation between the two. As we advance from the nascent stages of the AI boom and demand for precious minerals and metals surges, the precarious dynamic between nations might collapse. China is not only the world’s primary source of refined lithium; its economy produces 83% of the world’s tungsten concentrate. Tungsten is a chemical element necessary for the manufacture of semi-conductors, which will be at the epicenter of the ongoing AI boom.

“AI is a great example of dependency,” said Lewis Black, CEO of Almonty Industries, the largest producer of tungsten ore outside of China. “The best algorithms are being written in the United States. Those algorithms run on these miraculous semiconductors made in Taiwan and South Korea, which are truly among mankind’s greatest technical achievements. But all of that depends on raw materials, particularly tungsten, procured almost exclusively from China. None of this is possible without raw materials that are outside our control. Can AI continue to progress without the cooperation of China? Without diversification of raw material supply, the answer is no.”

China’s control of tungsten, lithium and other elements that are fundamental to AI manufacturing threaten to increase US dependence on it and derail the delicate balance of power between the US and China. For this reason, the United States will need to find alternative sources of tungsten.

This is where the third country of the symbolic triangle comes into play. South Korea is home to the Sangdong mine, which was the biggest tungsten mine in the world until low global tungsten prices forced it to close in the early 1990s.The mine is being modernized by Almonty Industries, a Canadian company that is the largest producer of tungsten outside of China. Lewis Black, who is CEO of Almonty Industries, understands the strategic significance of tungsten and the mine in Korea. “Sangdong has a big role to play in diversification of strategic metals,” Black said. Korea uses more tungsten per capita than any country in the world, and now they will have a tungsten mine. The Sangdong mine will indirectly benefit US industries by expanding the amount of tungsten on the world market from allied countries, which is important because there are no tungsten mines in the US.”

While South Korea and the United States have been allies for decades, political leaders in both countries do not agree on how to manage their respective relationships with China. Many members of the executive branch in the US are skeptical that Seoul would support a more direct confrontation with the Chinese. In order to effectively check China’s economic power, the two senders need to establish a unified front by finding common ground on how to manage the relationship with the target. Alliances are more likely to endure when they are built on the common interests and objectives of the participating nations.

The US government must diversify the sources from which it gets its raw materials. Black sees the the Sangdong mine as proof that the free market has solutions for alternative sources, but it just takes time. “The regulatory requirements of doing business in a democracy means that it will take 8 to 10 years to open a mine. But that’s OK, diversification can still happen.” A focus on nurturing its relationship with S. Korea and other countries replete with essential elements will help the US maintain the balance of power that has defined its complicate cooperation with China.

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