US Needs Alternatives to China’s Rare Earth Monopoly
As the trade war goes on, China threatens to deprive the US of critical elements its economy and its military can’t do without
If America is to be successful in its bid to roll back China’s power and influence over the rest of the world, ensuring its own supply of strategic REE is not just an option, it’s a necessity.
A cyclist wears a protective face mask while riding along a dusty road where dozens of factories processing rare earths, iron, and coal operate on the outskirts of Baotou city in Inner Mongolia, northwest China, on April 21, 2011. Frederic J. Brown/AFP/Getty Images
Many consider China’s vast portfolio of U.S. Treasuries as their not-so-secret weapon in the ongoing trade war. And it some ways, that is certainly true. China could decide to liquidate much or all of its U.S. bond holdings in response to rising tariffs and use other tactics, like currency devaluation.
But such a move would damage their economy along with America’s. The Chinese are smarter than that.
China State Media Hints at Embargo
Besides, the Chinese Communist Party (CCP) has another, more tangible ace up its sleeve. As unbelievable as it sounds, China holds a near global monopoly on the supply —or more accurately, the processing capacity—of rare earth elements (REE).
James Gorrie
Author
James R. Gorrie is the author of “The China Crisis” (Wiley, 2013) and writes on his blog, TheBananaRepublican.com. He is based in Southern California.
