China’s Rare Earth ‘Monopoly’—and Why Markets Will Break It

The minerals aren’t rare. China’s marginal advantage is a willingness to accept human and environmental costs other nations eschewed.

Environmental impact is visible near an industrial plant in Baotou, Inner Mongolia, China, on Feb. 4, 2016. ebenart/Shutterstock

Commentary

With its recent announcement of a trade deal with China, the White House intended to reassure markets, manufacturers, and the military that China would not sever the supply lines of “rare earths” to the United States. Among other concessions, Beijing committed itself to avoid restricting exports of rare earth elements and related critical minerals essential to advanced manufacturing, clean “green” energy, and modern weapons systems. The agreement was described as a win for American economic strength and national security. But the very need for such a promise reveals an uncomfortable truth: the United States, long the world’s leading industrial power, has become dependent on the goodwill of a strategic rival for materials central to its economy and its defense.