The US House of Representatives Committee on Financial Services has sent a letter to President Donald Trump requesting the termination of conflict mineral disclosure requirements, as they threaten US strategic interests and create unintended humanitarian harm.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted during the Obama Administration, following the fallout from the Great Recession, required firms to disclose the progeny of commodity and other mineral products. The letter asks for the Securities and Exchange Commission to make a substantial revision or a complete waiver.
Today, due to the rule, firms have become dependent on the United States’ top adversary, China.
Some believe that dependence on China is leading the US on the path to its own demise. A potential conflict with Taiwan may take place in the coming years, and many believe a kinetic conflict will lead to a US war with mainland China. Taiwan remains a key provider of technology in the US that many industries depend upon to operate – a situation that cannot be resolved immediately, much less in the coming years. Severing a relationship with China would be devastating for the economy, not just America’s, but the entire world.
The letter asks for a waiver on conflict minerals as they are “essential inputs for semiconductors, defense systems, and other advanced technologies. Yet the United States and its allies face a growing strategic vulnerability: overreliance on the People’s Republic of China for the processing and supply of critical minerals.”
The disclosure requirements have led companies to avoid the continent of Africa. At the same time, this exit of domestic firms has led China to move in to dominate the supply of these much-needed materials.
Additionally, effectively blocking US access to African commodities has reportedly worsened conditions for populations in many African territories.
The request is a seemingly valid illustration of the law of unintended consequences, as policymakers sought not to provide funding for nefarious groups, yet beneficial intent led to a negative outcome.
