Beijing, China – As tensions rise between the US and China due to escalating trade war, the focus has shifted from tariffs to export controls on critical rare earth minerals and magnets. China’s decision to impose export restrictions on these essential minerals has delivered a significant blow to America, highlighting its heavy reliance on these resources. This move has prompted the Trump administration to take steps towards boosting US production of critical minerals to reduce dependence on imports.
Rare earths, a group of 17 chemically similar elements crucial for manufacturing high-tech products, are now at the center of the trade war. These elements, such as Neodymium, Yttrium, and Europium, are used in various products like loudspeakers, computer hard drives, TV screens, and medical technologies. However, China currently holds a near monopoly on the extraction and processing of rare earths, giving it the power to control the global supply chain.
China’s strategic focus on developing rare earth mining and processing capabilities over the years has allowed it to dominate the rare earths market. As a result, the recent export restrictions imposed by China, in response to US tariffs, have the potential to severely impact the US. With heavy rare earths essential for defense technologies like missiles and radar, the US defense industry, as well as manufacturing sectors, could face shortages and production delays.
Although the US has one operational rare earths mine, it lacks the capacity to process heavy rare earths and must rely on China for processing. Efforts to reduce dependency on China include exploring options in countries like Ukraine and Greenland, which possess significant reserves of rare earth elements. However, strained international relations due to tariffs and trade disputes could hinder US efforts to diversify its rare earth supply chain.
President Trump’s recent order to investigate national security risks posed by the US reliance on critical minerals underscores the importance of securing a stable supply of rare earths. The potential impact of reduced rare earth exports from China on US defense capabilities, infrastructure development, and technological innovation highlights the urgency for the US to address its reliance on foreign sources for critical minerals. As the trade war continues to unfold, the implications of China’s export controls on rare earths for the US economy and national security remain a pressing concern.