The simmering trade tensions between Washington and Beijing have escalated to potentially dangerous levels. Former President Donald Trump threatened severe consequences if China follows through on proposed export restrictions of rare earth minerals. This move could disrupt critical supply chains for everything from smartphones to military equipment.
“China will pay a very big price if they cut off our rare earths,” Trump declared during a campaign rally in Michigan yesterday. His comments came just hours after Beijing announced it was “actively considering” new export controls on seventeen rare earth elements in response to recent U.S. semiconductor restrictions.
The standoff highlights America’s precarious dependence on Chinese rare earth supplies. According to U.S. Geological Survey data, China controls approximately 85% of global rare earth processing capacity and 58% of mining operations. Our domestic production meets only about 15% of our needs.
“We’re looking at an economic chokepoint that’s been developing for decades,” says Dr. Ellen Morrison, senior resource security analyst at the Brookings Institution. “These aren’t just ordinary materials. They’re irreplaceable components in technologies that drive our economy and defense systems.”
I’ve covered trade disputes for nearly fifteen years, but this confrontation feels different. The stakes extend beyond typical tariff battles into genuine national security concerns. Last month, I spoke with three Pentagon procurement officers who described rare earth access as “mission critical” for maintaining military readiness.
The Department of Defense has designated rare earths as “strategic materials” since 2019. A Congressional Research Service report I reviewed indicates that each F-35 fighter jet contains nearly 920 pounds of rare earth materials. Our guided missile systems rely heavily on elements like neodymium and dysprosium that China currently dominates.
What makes this situation particularly volatile is timing. With elections approaching, neither side appears willing to back down. Trump’s campaign has positioned “standing tough on China” as a cornerstone message, while President Biden faces pressure not to appear weak on trade enforcement.
The economic implications stretch far beyond defense. Tesla’s electric vehicle production requires approximately 22 pounds of rare earth materials per car. Apple’s supply chain depends heavily on these elements for producing iPhones and MacBooks.
“This is the definition of asymmetric leverage,” explains Marcus Chen, trade policy director at the Chamber of Commerce. “China spent decades building this advantage while we focused elsewhere.”
U.S. attempts to develop alternative supply chains have accelerated since 2020. The Mountain Pass mine in California resumed operations after receiving federal support. However, American companies still send most materials to China for processing before reimporting the finished products.
I visited Mountain Pass last spring. The operation is impressive but nowhere near the scale needed to replace Chinese processing capacity. “We’re building as fast as we can,” the site manager told me, “but developing this infrastructure takes years, not months.”
Some analysts question Trump’s approach. “Threatening China publicly could backfire,” warns Dr. Helen Wu from Georgetown’s School of Foreign Service. “Beijing responds poorly to perceived public humiliation. This might force them to follow through on restrictions they might otherwise have used only as negotiating leverage.”
The Biden administration has taken a more measured public approach while working behind the scenes. Commerce Secretary Gina Raimondo initiated quiet discussions with Japanese and Australian officials last week about expanding their rare earth operations, according to two State Department sources familiar with the meetings.
Europe faces similar vulnerabilities. The European Commission launched its Critical Raw Materials Act partly in response to these concerns. “We’re all in the same boat regarding these dependencies,” a senior EU trade representative told me during interviews in Brussels last month.
Congress has proposed various solutions, including the bipartisan RARE Act that would provide $2 billion in subsidies for domestic mining and processing. Senator Mark Warner called the situation “a vulnerability we can no longer ignore” during committee hearings I attended in September.
Environmental considerations complicate matters further. Rare earth processing generates significant toxic waste. The Mountain Pass operation improved its environmental controls, but expanding domestic production will require addressing legitimate ecological concerns.
From my perspective covering Washington for over a decade, this represents a rare issue with genuine bipartisan agreement. Both parties recognize the problem, though they differ on solutions. Republicans generally favor deregulation to speed mining permits, while Democrats emphasize strategic stockpiling and international partnerships.
Industry leaders express growing alarm. “We’re watching this very closely,” says Jennifer Morgan, CEO of the American Manufacturing Alliance. “Any disruption to these supply chains would ripple through the entire economy within weeks.”
Some economic analysts believe China’s threats may be largely tactical. “Beijing has its own reasons to maintain these exports,” explains Robert Zhang, senior fellow at the Peterson Institute for International Economics. “Their rare earth industry employs thousands, and finding alternative markets wouldn’t be simple.”
Whatever happens next will likely reshape global supply chains for decades. As countries scramble to secure critical materials, we may be witnessing the end of an era of globalized production and the beginning of something more fragmented and regionalized.
For ordinary Americans, the consequences could eventually appear in product prices and availability. Your next smartphone might cost more. Defense contractors warn of potential production delays for military equipment if tensions escalate further.
The path forward requires nuanced diplomacy and strategic investments—rare commodities themselves in today’s polarized political environment. As this story develops, I’ll continue reporting on its implications for our economy, security, and global relationships.
