The head of the World Trade Organization warned Tuesday against splitting the global economy into rival blocs amid the war in Ukraine, calling on countries not to restrict trade at this time of crisis.
Here we go! It is in every scenario: the sanctions imposed on Russia are ineluctably tilting its economy towards the Chinese economic space. Russia is an economic dwarf BUT its territory is huge and has raw material resources essential to the 5ᵉ industrial revolution. These resources are now in the Chinese camp. China, on the other hand, will eventually control African resources. The US has an ecosystem of independence. Europe has nothing at all.
The example of lithium
So Europe will be dependent on the USA, because raw materials are like blood in a living organism, we cannot do without them.
Current example: lithium. This metal is indispensable for making batteries. Batteries are essential to the energy transition, even if the Europeans don’t talk about it. Their first use (before electric cars) is already in the USA, the ‘storage’ of electrical energy.
Price of lithium per ton (in its usable carbonate form): it has risen from $17,000 in 2020 to $77,000 in 2022. This is the price used to set the price of batteries for European electric vehicles. Tesla, over time, has made a host of agreements to secure its supply – it is starting to operate its own mine in Nevada. Its average cost is estimated to be less than $10,000… and that’s all of China, too… It’s impossible to fight such cost differences. And the problem gets worse with ‘storage’.
Europe, an American province
As a result, European car manufacturers have the choice between dying or falling into the hands of the Americans or, above all, the Chinese… The same goes for ‘local’ electricity.
The economic underdevelopment of Europe is assured, it is condemned to be a kind of American province. And Macron’s declarations on the ‘next move’ and his ‘hydrogen economy’ are ubiquitous. Nature laughs at political statements.
Note: Lithium, like all commodities, does not care about the ICC…