Digging in on rare earth, the next front in the US supply chain war with China
- US scrambling to close the gap with China, which dominates the mining and refining of these essential materials for hi-tech military and consumer products
- The drive to develop in US taps Donald Trump’s themes of reviving extractive industries and ‘reshoring’ American jobs
China hawk Ted Cruz, a Republican senator from Texas, recently introduced a bill to spur US production of critical minerals, among the latest of several before Congress amid rising concern that China could leverage its dominance in economic and political negotiations.
“It’s making people in Washington wake up and say this is not sustainable,” said Martijn Rasser, a fellow at the Centre for a New American Security. “If China really is willing to restrict exports, we’re in for a rough ride over the next few years.”
But China’s strategic-metals grip is so strong and the challenges in competing against its state-led model so great that some estimate it could take over a decade to create a relatively secure US supply chain. The US has also made some significant missteps that haven’t helped, critics say.
01:44
Amid US-China trade war, China aims to elevate its domestic rare earth industry
Strategic concerns over rare earths mirror larger calls to reduce US dependence on China – spurred on by critical Covid-19 shortages of personal protective equipment – as President Donald Trump threatens to “completely decouple” the two massive economies.
“The rare metals issue is a microcosm of the broader trend,” said Paul Haenle, chair at the Carnegie – Tsinghua Centre and a former China affairs director at the National Security Council. “The issue of rare earth exports is particularly important because it also represents national security concerns.”