Department of Commerce launches Section 232 neodymium magnets probe

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Public Policy

The Department of Commerce has initiated a Section 232 investigation covering neodymium-iron-boron magnets, the department announced Sept. 24.

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Section 232 investigation to cover neodymium magnets

neodymium magnet

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The Trump administration used Section 232 of the Trade Expansion Act of 1962 to investigate whether steel and aluminum imports are having a harmful impact on national security. Ultimately, as metals buyers know, the former president opted to slap tariffs on steel and aluminum of 25% and 10%, respectively.

Meanwhile, neodymium magnets go into a wide variety of applications, including wind turbines, electric vehicles and cordless tools, among many others. In addition, as the DOC noted, neodymium magnets also have military applications in fighter aircraft and missile guidance systems.

“The Department of Commerce is committed to securing our supply chains to protect our national security, economic security, and technological leadership,” Secretary of Commerce Gina Raimondo said. “Consistent with President Biden’s directive to strengthen our supply chains and encourage investments to shore up our domestic production, the Department initiated a Section 232 investigation on imports of NdFeB permanent magnets to determine whether U.S. reliance on imports for this critical product is a threat to our national security.”

The DOC asked interested parties to submit written comments, data, analyses, or other information to the Bureau of Industry and Security by Nov. 12, 2021.

Supply chain review

Earlier this year, President Joe Biden issued an executive order calling for 100-day supply chain reviews conducted by several department heads.

Furthermore, the order, called for consideration of whether or not to initiate a Section 232 probe covering neodymium magnets.

The administration released the results of the 100-day reviews in June. The reviews covered U.S. supply chains for rare earths, semiconductors, pharmaceuticals and large-capacity batteries.

Furthermore, the supply chain review report touched on neodymium.

“Material flow analyses are also an important tool to identify outsized foreign reliance and vertical integration in supply chains,” the report stated. “The neodymium-iron-boron (NdFeB) magnet supply chain is an example of a strategic and critical materials supply chain where one country is able to maintain vertical capabilities throughout the supply chain, while multiple other countries operate at only select tiers (see Figure 2). These examples show that material flows can potentially be relatively concentrated within a country, or they can follow a circuitous global path. Though only China has all essential supply chain tiers, at least some nominal capacity exists for each tier in a combination of countries outside China.”

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