Trump races to shore up rare earth supply
Trump administration officials announced plans this week to take a more active role in ensuring access to “rare earths” — minerals that are key components in several important technologies — in response to new Chinese export restrictions.
The new rules give China significant leverage in its trade war with the U.S. as both nations race to dominate the future of AI and the semiconductor chips essential to powering the technology.
The U.S. and China have butted heads over tech exports and defense-related technologies for decades, and Beijing could ease or issue exemptions to the new rules to bring the temperature back down.
But China’s latest actions, experts say, reflect an unprecedented willingness and ability to test the boundaries of its relationship with the U.S. at a dangerous time for the dynamic between the two nations.
“We’re just playing with fire here,” said Edward Alden, senior fellow at the Center for Foreign Relations.
“We don’t actually know what the potential consequences are. We may be able to keep this to a fairly small blaze, or it may really burn out of control with extraordinary consequences that are hard to forecast.”
Months of progress toward a U.S.-China trade pact skidded to a halt last week when the Chinese government announced new, wide-ranging restrictions on rare earth minerals and related products.
The restrictions require companies to seek licenses for products manufactured abroad that contain trace amounts of certain rare earth minerals from China or rely on Chinese rare earth mining technologies.
It also announced new export controls on five additional rare earth minerals, as well as various rare earth and lithium battery related technologies.
The move threatens to upend numerous high-tech industries that are dependent on the materials.
These materials are essential for semiconductors, electric vehicles and U.S. F-35 fighter jets. China plays an outsized role in the sector, accounting for nearly 70 percent of the world’s rare earth mining as of 2024, according to Oxford Economics.
Owen Tedford, a senior research analyst at Beacon Policy Advisors, suggested the Chinese government sees this as leverage that it can use to pressure Washington to roll back restrictions.
“The Chinese see this as being a very powerful source of leverage, in large part because the supply chain outside of China is not well-developed, so there aren’t easy substitutes for the U.S. to go and increase their purchases from,” Tedford said.
Check out the full report at TheHill.com.
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