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Tensions between the United States and China have continued to escalate with President Donald Trump’s administration fueling speculation of an impending trade war.

Over the past month, Trump has introduced tariffs to steel and aluminium imports into the United States and last week further increased tensions by introducing $50 billion worth of tariffs on Chinese goods.

“We’re not afraid of a trade war, but that’s not our objective,” said Steve Mnuchin, US Treasury Secretary, in an interview with Fox News.

In an attempt to reduce the United States’ significant trade deficit with China, the administration’s protectionist policies will attempt to reduce US reliance on China and more on other global trade partners. This bodes very well for Australian rare-earth miner Northern Minerals (ASX:NTU).

At present, China is the dominant force in the rare-earth industry, supplying approximately 90% of global supply, however Trump is keen to source the crucial elements elsewhere.

“The United States and Australia agreed to work together on strategic minerals exploration, extraction, processing and research and development of rare-earths and high performance metals to sustain the jobs of today and develop the jobs of tomorrow,” said President Trump on February 24.

One rare-earth critical to the rapidly increasing production of electric cars is dysprosium. Northern Minerals aim to fill the global supply gap for dysprosium and be the world’s largest dysprosium producer outside of China which augurs well for Australian-US trade relations.

As a result, Northern Minerals management have had a sizable increase of inquiries as US-China trade war speculation increases.

“We had some really constructive discussions last week at the Lithium and Battery Minerals Conference so the market appears just as excited by our Browns Range project as we are,” said George Bauk, Northern Minerals Managing Director.

With Northern Minerals’ pilot plant on schedule for completion by June, trade partners are already knocking on their door in anticipation of production which is set to commence in July 2018.

Northern Minerals trade under the ASX code ‘NTU’.

*OzFinancial are paid a retainer for assisting NTU with their Investor Relation Communications