Rare Earth Ban on the World - Now it’s China’s Turn to Turn Up the Heat

Picture Credit: Science News

President Trumps tariff policy has been put on a temporary 3-month hiatus just 2 weeks after he announced it on “Liberation Day”. While White House officials assure the public that it was all part of president Trumps negotiation strategy, congress is not as convinced as currently there are ongoing hearings with the Trade Representative Ambassador Jamieson Greer.

While this unfolds in the capital, the world has had a mixed response to Trumps tariff gamble. With some countries are ready to negotiate new trade terms, some are not as convinced with the United States provoking strategies, China is on top of that list.

China and the US have been on a tariff raising tit-for-tat ever since the announcement of Trumps reciprocal tariffs. This has escalated the tensions between the two superpowers to the point of a full-blown trade war between the two. While the Trump administration has largely focused on tariffs, their Chinese counterparts have focused on other pressure points such as the widening of export controls of rare-earth minerals.

Rare earth minerals are a series of elements that are vital for many electrical appliances all the way from loudspeakers to jet engines. Thomas Kruemmer, Director of Ginger International Trade and Investment comments best explains it “everything you can switch on or off likely runs on rare earths”.

Unfortunately for the US, China holds a near monopoly on mining and refining rare earth minerals, the International Energy Agency (IEA) estimates that China accounts for over 61% of the production process and 92% of the mining process. This means that China dominates this industry and controls the entire world supply chain for this resource, and this was the result of decades of government planning and investing.

It is estimated that between 2020 and 2023, the US relied on China to supply 70% of its rare earth minerals. The defense industry will be hit particularly hard as it heavy rare earths are essential in constructing defense technology such as the F-35 fighter jets and Tomahawk missiles. “The impact on the US defense industry will be substantial” comments Kruemmer. This move from China will also directly hinder Trumps plan to revive the US manufacturing sector which was the main goal behind his tariff policy.

The US currently has only one operational rare earth mine however it still lacks the capability to refine the ore. Trump and his administration are aware of this dependency and are trying to sever this bond by looking for other partners to supply their rare earth minerals such as Ukraine or Greenland, but this will not be an easy task to accomplish.

Critical materials research fellow at the University of Birmingham Dr Harper comments, “The challenge the U.S. faces is two-fold, on the one hand it has alienated China who provides the monopoly supply of rare earths, and on the other hand it is also antagonizing many nations that have previously been friendly collaborators through tariffs and other hostile actions”.