The trade war between the U.S. and China escalated again last week when China threatened to cut off the U.S.’s supply of rare earth metals, elements that are critical for many industries.

As the world’s biggest producer, China supplies about 80% of U.S. imports of rare earths (see the following chart).

Bloomberg reports, “The threat to weaponize strategic materials ratchets up the tension between the world’s two biggest economies before an expected meeting between Presidents Xi Jinping and Donald Trump at the G-20 meeting next month. It shows how China is weighing its options after the U.S. blacklisted Huawei Tech Co., cutting off the supply of American components it needs to make its smartphones and networking gear.”

As mentioned in last week’s column, while it’s impossible to predict when geopolitical events will shake equity markets, a diversifying position in gold can take some of the “bite” out of equity market losses and preserve capital in a portfolio.

Rick Andrews is president of Avant Capital Management